In Regulatory Wrap for the week to October 24, Jay Hampshire covers FINRA’s $10,000 fine against an individual for off-channel breaches.
In this week’s Regulatory Wrap, we discuss FINRA’s $10,000 fine against a former Wells-Fargo broker for utilizing a private device to send off-channel communications – and then deleting them – which violated company policies and recordkeeping regulations.
1. FINRA’s investigation found that a broker sent text messages containing “customer information and requests to transfer funds from customer accounts” on a private device, which breached policies banning the use of texts for business communications
2. The broker also attempted to conceal his misconduct by deleting these messages from his device and asking the colleague he was communicating with to do the same
3. This behavior was a clear violation of FINRA Rule 2010, which requires firms and brokers uphold “high standards of commercial honor”
4. In response, the broker was fined for “failing to conduct business through firm-approved communications technology,” was asked to resign, and was charged with a one-year suspension
5. Despite a decrease in enforcement action over the past year, FINRA’s ongoing fines – which including cases related to off-channel comms exam cheating misconduct– demonstrate the regulator’s continued focus on compliance
This week’s Regulatory Wrap is brought to you by Global Relay’s Senior Content Writer, Jay Hampshire.
The overall frequency of enforcement may be dwindling, but recent developments prove that, for FINRA, compliance is still a priority – and now, it’s personal.
