COVID-19 has impacted the world’s operations tremendously. From volatile markets, to business loan grief, and overwhelming cyber threats, member firms have been forced to a new work environment, remote. Though the world entirely has been forced to a pause, FINRA has notified member firms they have used this time of uncertainty to crack down rule and regulation enforcement to protect investors.
As member firms have moved to a remote setting, the need for electronic communication has never been more critical to a business operation. Member firms have been forced to quickly reroute and find new ways to stay in contact with their clients, so quickly they may have forgotten the rules still apply. During the first six months of the year, disciplinary actions have not slowed down and grew with a focus on electronic communications. From January 2020 to June 2020, FINRA filed approximately ninety-one email related disciplinary actions, which accounts for 32% of the total disciplinary actions during that time period.
On July 9, 2020, Think Advisor published an article discussing FINRA’s recent investigation of ex-JP Morgan rep, Adrienne Jaime Mak. FINRA made the final decision to bar Mak from association with any FINRA member in any capacity after violating JP Morgan’s Firm Policy.
On May 25, 2018, JP Morgan filed a Form U5 disclosing Mak’s termination reason as discharged. Mak reportedly violated JP Morgan’s Firm policy as she used her personal email and mobile phone to communicate with clients. JP Morgan also found Mak added a customer’s initials next to a change on an investment switch letter. FINRA launched an investigation of the circumstances into Mak’s termination. FINRA requested Mak provide additional information regarding JP Morgan’s termination decision, twice she did not respond violating FINRA Rule 8210 and 2010.
After several requests made by FINRA, Mak was advised she would be automatically barred if she did not request termination of her suspension on grounds of full compliance. On January 17, 2019 Mak’s request to terminate her suspension was denied by the Department of Enforcement.
Asgard strongly recommends to all clients to ensure Firm policies and procedures are strictly enforced. As member firms grow heavily dependent on electronic communications, it is recommended to review the Firm’s relevant polices and ensure all activities including electronic communications are closely monitored.