The financial industry watchdog stated that the firm should have been aware that a representative was using a “non-firm instant messaging account” to conduct the firm’s business. Note that these disciplinary actions were only levied against firms and individuals who violated the record keeping and supervisory requirements regarding electronic communications such as text messages.įINRA censured and fined the New York-based firm for a total amount of $290,000 after it failed to establish a system of reasonable supervision, including Written Supervisory Procedures (WSPs), for the review of orders entered by firm customers, and also because it failed to maintain systems to detect potentially manipulative trading activity.Īccording to the findings, one of the supervisory requirements the firm failed to meet is the review of their representatives’ electronic communications. To further understand the significance of complying with FINRA, we detail in this post the summary of the disciplinary actions taken by FINRA from January to June 2018. Non-compliance with its text message archiving and supervisory requirements regarding electronic communications can lead to significant fines and penalties.
In our previous post, we discussed that a no-texting policy is no longer sufficient to protect financial organizations from the increasingly stringent Financial Industry Regulatory Authority (FINRA) regulations.
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