The Financial Industry Regulatory Authority has fined and suspended a general securities rep for using WhatsApp Messenger to communicate with six clients about securities-related business while employed at Jefferies LLC.
The clients included a close friend from whom the rep, Ariel Rivero, had taken a $500,000 loan without Jeffries' approval and a former brother-in-law who complained of losses in his account.
Rivero first registered with FINRA in 2000 through an association with Merrill Lynch, according to FINRA's BrokerCheck site. From May 2016, through January 2022, Rivero was registered with FINRA as a general securities representative through an association with Jefferies. He is now registered with Insigneo Securities LLC. He has been dually registered as an investment advisor for most of his career.
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 busines," FINRA's order states.
Because WhatsApp was not one of Jefferies' approved electronic communications channels, "the firm did not preserve Rivero's WhatsApp communications as required by Section 17(a) of the Securities Exchange Act of 1934 and Exchange Act Rule 17a-4(b)(4)," FINRA found.
By causing Jefferies to maintain incomplete books and records, Rivero violated FINRA Rules 4511 and 2010.
From November 2020 to January 2022, Jefferies' written supervisory procedures prohibited registered reps from communicating with customers about securities business through unapproved messaging services such as WhatsApp.
