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Regulatory Sanctions

Broker Erred with Texts & Personal Email to Administrative Assistant

March 27, 2018

by Howard Haykin


A broker with American Portfolios was sanctioned for the very first time in his 31-year career – for using unapproved personal emails and text messages to communicate with an unregistered administrative assistant about member firm customers. The oversight cost him $5,000 and a 10-day suspension.


FINRA FINDINGS.    From August 2015 through May 2016 (the “Relevant Period”), this broker communicated with his unregistered admin assistant using 2 personal email addresses and the text message function of his personal smartphone, none of which were networked to the Firm’s retention system of e-communications.


  • The emails exchanged by the broker and his assistant concerned approximately 20 Firm customers and included information regarding the customers’ assets, securities holdings, and financial goals.


  • The text messages to his assistant primarily concerned trades in the broker’s own personal brokerage account – though on one occasion he used a text message to transmit a customer order to his assistant.


FINANCIALISH TAKE AWAYS.    While some may view brief texts and personal emails between office personnel as nothing more than small, informal and low-level conversations, regulators view such exchanges as business-related communications that need to be retained (and be subject to review) by the broker-dealer.  


It’s admittedly a difficult habit to break – but one that needs to be addressed if registered persons are to avoid unnecessary sanctions.


This case was reported in FINRA Disciplinary Actions for March 2018.

For details on this case, go to ...  FINRA Disciplinary Actions Online, and refer to Case #2014040024301.