A broker's WhatsApp messages pertaining to securities business landed former Jeffries LLC representative Ariel Rivero in hot water with regulators, which have been cracking down on brokerages that fail to correspond with customers within approved communication channels, such as via the firm's company e-mail accounts.
The danger of communicating away from the firm through text messages, WhatsApp, or personal (non-firm) e-mail addresses is that if a broker fails to use their company's official account, the messages they send through extracurricular channels aren't accessible to the firm, which means supervisors aren't able to review communications for potential red flags such as unsuitability and the firm isn't able to retain records as required by industry rules.
When these off-site communications drift into misrepresentation or unsuitable recommendations territory, they can result in customer losses that go undetected and unchecked by a firm that cannot supervise its broker. In essence, unauthorized messaging apps have the potential to serve as a gateway for other, more severe, misconduct.
After a customer settled a complaint against Jeffries LLC broker Ariel Rivero for misrepresenting risk and facts related to unsuitable outside investments, FINRA opened an investigation into Rivero, finding that he improperly used WhatsApp to send messages to customers, meaning their conversations were conducted away from the firm and outside the scope of its supervisory capabilities.
Specifically, Ariel A Rivero (CRD #4236679), who now works for Insigneo Securities, allegedly exchanged "hundreds of securities-related messages" with a handful of firm customers, in direct contravention of firm policy prohibiting the use of unauthorized messaging services, such as WhatsApp.
As a result, these securities-related conversations, which included authorization to buy or sell stocks, account performance, and even a discussion related to a customer complaint and loan, all evaded supervision and thus perpetuated without oversight.
One such communication pertained to an unauthorized loan Rivero received from a customer, and another showed that Rivero attempted to settle a customer complaint without firm permission, potentially avoiding FINRA disciplinary disclosure as well.
If a broker or investment adviser has corresponded with you regarding securities business using unapproved methods—such as a social media app, text messages, or through other non-firm means—and the subsequent lack of supervision resulting from this outside communication has resulted in losses due to unsuitable recommendations, misrepresentations, or other misconduct, please call an experienced FINRA arbitration attorney at The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for an investigation and consultation.