FINRA censures and fines broker-dealer for use of instant messaging app.
A FINRA registered broker-dealer had written procedures that prohibited the use of instant messages for business purposes unless the firm granted an individual permission to use them. However, the firm had no procedures to ensure that its representatives were complying with this prohibition and no procedures for capturing, reviewing, or retaining business-related communications sent or received via instant message. Between 2016 and 2019, Insight Securities failed to capture, review, or retain more than 10,000 business-related WhatsApp instant messages sent or received by 20 different Insight Securities representatives. In doing so, Insight Securities violated Section 17(a) of the Exchange Act, Rule 17a-4 of the Exchange Act, and FINRA Rules 4511, 3110 and 2010. The firm entered into a settlement with FINRA that included a censure and $50,000 fine.
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