It appears that individuals registered with the Financial Industry Regulatory Authority Inc. are now becoming targets of the variety of ongoing investigations by securities regulators focusing on the unauthorized use of electronic communications systems like text messaging or WhatsApp.
Finra on Monday fined and suspended Ariel Rivero, an individual registered rep working at Jefferies in Miami at the time of his violations of industry rules regarding communications. Finra has taken a handful of similar actions against individual brokers the past couple years.
"Between November 2020 and January 2022, Rivero used WhatsApp Messenger, a mobile phone application used to send and receive encrypted messages, to communicate with six firm customers about securities-related business," according to Finra. "Because WhatsApp was not one of Jefferies’ approved electronic communications channels, the firm did not preserve Rivero’s WhatsApp communications."
Rivero was fined $15,000 and suspended from working in the securities industry for six months, according to the settlement, which the broker agreed to without admitting to or denying Finra's findings in the matter.
Rivero did not return a phone call Wednesday to his new firm, Insigneo Securities, to comment. According to Finra, Rivero also broke industry rules when he borrowed $500,000 from a client in 2020 without Jefferies' approval and again in 2021 when he attempted to settle a client complaint without telling his firm.
The use of unmonitored messaging apps by financial advisors and employees at wealth management firms has been on the rise in the wake of the Covid-19 pandemic, which reshaped how advisors interacted with colleagues and clients. Messaging apps like WhatsApp and email platforms like Gmail are beginning to play an oversized role in advisor communications, a trend that could increase as more clients choose to communicate via their smartphones.
The Securities and Exchange Commission has been hitting firms with severe fines over the issue of not monitoring or storing financial advisors' text messages or WhatsApp communications. In February, the SEC smacked 16 firms with $81 million in penalties related to its investigation of how the financial advice industry at times mishandles electronic communications, including personal texting, among employees and financial advisors.
Finra has previously penalized firms and individual financial advisors over personal text messaging with clients, but the regulator's focus may be sharpening in the wake of the SEC's investigation, one attorney said.
"It appears now that Finra may be picking up the SEC's scraps and focusing on this as intensely as the Commission has for the past few years," said Andrew Stoltmann, a plaintiff's attorney. "This also could be the regulators using text messages and WhatsApp violations as an add-on issue to other bad behaviors, like a broker borrowing money from a client without telling his firm."
Elsewhere in Utah, Raymond James also welcomed another experienced advisor from D.A. Davidson.
A federal appeals court says UBS can’t force arbitration in a trustee lawsuit over alleged fiduciary breaches involving millions in charitable assets.
NorthRock Partners' second deal of 2025 expands its Bay Area presence with a planning practice for tech professionals, entrepreneurs, and business owners.
Rather than big projects and ambitious revamps, a few small but consequential tweaks could make all the difference while still leaving time for well-deserved days off.
Hadley, whose time at Goldman included working with newly appointed CEO Larry Restieri, will lead the firm's efforts at advisor engagement, growth initiatives, and practice management support.
Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.
Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.
