The Financial Industry Regulatory Authority has fined Aegis Capital Corp. broker Paul Falcon $5,000 for using Facebook’s WhatsApp Messenger to communicate with three of his overseas clients several times a month on his personal cellphone. The regulator also suspended Falcon for 30 days.
According to a FINRA letter of acceptance, waiver and consent, Falcon sent nearly 900 texts to three clients from November 2017 to June 2019, many of which concerned securities-related business.
Aegis’s written supervisory procedures state that electronic business communications can only be accessed and transmitted through Aegis sponsored systems so that it can review, monitor, and audit the communications. In addition, Aegis employees can only use mobile devices the firm has issued and authorized.
In the firm’s annual personal activity questionnaire, Falcon disclosed using WhatsApp to communicate with overseas customers, although Aegis had not approved the messaging application and it did not capture messages that were sent or received.
Falcon, who agreed to FINRA’s sanction without admitting or denying the findings, has been associated with Aegis Capital since July 2013 as a general securities representative, investment company and variable contracts products representative and general securities sales supervisor.
