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NEWSLETTERS & ALERTS
Broker Overindulges in a Firm's Permission to Use Personal Email
by Howard Haykin
FINRA's account of this case seems more plausible. However, I can accept the broker’s explanation that he received temporary permission to use a personal email account for what essentially was a 2-week corporate finance deal. Yet, according to FINRA, the broker continued to conduct securities business on his personal email account for a full 12 months after the deal closed - and failed (chose) not to forward all relevant emails to Capital City as per the instructions he was given. Apparently, this veteran broker, with 31 years’ experience, couldn't be bothered with such trivial matters.
FINANCIALISH TAKE AWAYS. How, then, is a firm supposed to convince a veteran broker to discontinue using his/her personal email to conduct securities business? The risk of a FINRA sanction won't do the trick because few individuals are ever sanctioned for this violation. And when FINRA does sanction someone, the fines and suspensions are relatively light in nature.
It would seem that the onus is on a designated compliance officer or firm supervisor. Using the above scenario, the designated individual might have tried to repeatedly remind this broker to discontinue his temporary use of the personal email account for firm business - or else continue forwarding such emails to the firm for review and retention. Ultimately, after a month or so, if it's discovered that the broker was still using his personal email account, then some form of internal disciplinary action, including a fine, might be in order.
Eventualy, most individuals respond to such annoying reminders and become compliant.
This case was reported in FINRA Disciplinary Actions for April 2019.
For further details, go to ... FINRA Disciplinary Actions Online, and refer to Case #2016048223001.