FINRA Suspends Rep in Text Message Incident
According to this month’s FINRA disciplinary actions notice, a representative from New York, New York was assessed a deferred fine of $7,500 and suspended from association with any FINRA member in any capacity for 60 days due to the entry of findings that contrary to her member firm’s policies, she used the text-messaging function of a non-firm-issued smartphone to exchange business related messages with a customer.
The findings stated that these messages included, among other things, recommendations of securities and discussions of the customer’s account performance at the firm. The representative also provided the customer with her personal email address and instructed the customer to use that email address in connection with a business-prospecting project that the customer was completing as her intern. The firm’s WSPs in effect required all electronic business communications to be transmitted only through firm-sponsored systems, and prohibited the use of personal email accounts for business communications.
The representative did not provide the firm with her communications with the customer or inform it that she was communicating with the customer via text message and personal email. Her use of text messages and a non-firm-issued email address caused her firm to fail to retain those communications and undermined the firm’s ability to supervise her communications with a customer.
The findings also stated that text messages sent to the customer contained exaggerated and promissory language or inappropriately projected performance of securities that she had purchased for the customer. For example, in one instance, the representative texted the client “I can make you $1000 in a day if you give me $2000 tomorrow [w]ith GPRO.” Later in the month she predicted that “ADHD will go up to $40 in two weeks.” In January 2016, she texted her client about a “no loss strategy using covered call.”
The suspension was in effect from November 7, 2016, through January 5, 2017.