Twitter Trouble: Social Media Gets Robo-Advisers in Hot Water

Texting, tweeting and emailing are second nature to people these days, but financial advisers who use social media in the wrong way are getting into trouble. If you've gotten a personal text or seen some tweets touting great investment returns, take a closer look. They could be some pretty serious red flags.

The Securities and Exchange Commission (SEC) recently fined two robo-advisers, Wealthfront Advisers and Hedgeable, for social media pitfalls. The proceedings are the SEC's first enforcement actions against robo-advisers, which provide automated, software-based portfolio management services. Both companies were charged with violating rules on recordkeeping, antifraud, advertising and compliance.

In December the SEC fined Wealthfront - one of the nation's largest robo-advisers, with $11 billion in assets under management -- $250,000 for improperly retweeting prohibited client testimonials, paying bloggers for client referrals without the required disclosure and documentation, and failing to maintain