FINRA suspends Aegis Capital representative over WhatsApp use for business communication

Maria Nikolova

Between November 9, 2017 and June 25, 2019, Paul Falcon used WhatsApp Messenger to conduct securities related business.

Paul A. Falcon, a General Securities Representative, Investment Company and Variable Contracts Products Representative and General Securities Sales Supervisor at Aegis Capital Corp, has entered into a settlement with the Financial Industry Regulatory Authority (FINRA).

Between November 9, 2017 and June 25, 2019 (the “Relevant Period”), Falcon used an unapproved third-party communication application, WhatsApp Messenger, to conduct securities related business with three customers of Aegis. Aegis was not able to capture the communications Falcon sent and received through WhatsApp Messenger. By virtue of the foregoing, Falcon violated FINRA Rules 4511 and 2010.

Aegis’s written supervisory procedures (“WSPs”) provide that electronic business communications can only be accessed and transmitted through Aegis sponsored systems so that Aegis can review, monitor and audit the communications. Aegis’s WSPs further provide that employees can only use mobile devices Aegis has issued and authorized.

On November 6, 2017, Falcon completed Aegis’s annual personal activity questionnaire in which he disclosed using a third-party application and communication system for business purposes. Specifically, Falcon stated that he used WhatsApp Messenger to communicate with overseas customers several times a month on his personal cell phone. Aegis had not approved this messaging application and it did not capture messages sent or received through this application.

On the same day, Falcon signed an Aegis Telecommunication Policy Acknowledgement confirming that he would use only communication devices Aegis issued and approved and that Aegis prohibited the use of text messaging to conduct business.

During the Relevant Period, Falcon continued to use WhatsApp Messenger for business-related communications with several overseas customers. In particular:

  • Between November 9,2017 and June 25, 2019, Falcon exchanged 348 WhatsApp communications with one customer, with many of the communications concerning securities-related business.
  • Between November 10, 2017 and March 20, 2019, Falcon exchanged 316 WhatsApp communications with another customer and many of these communications concerned securities-related business.
  • Between November 10, 2017 and June 8, 2018, Falcon exchanged 230 WhatsApp communications with another customer and many of these communications concerned securities-related business.

Falcon primarily used his personal cellular telephone to communicate via WhatsApp Messenger, but occasionally used his desktop computer at Aegis as well. Aegis did not approve Falcon’s use of WhatsApp Messenger, nor did the firm capture the communications sent and received through WhatsApp Messenger so that it could maintain and preserve them.

Falcon violated FINRA Rules 4511 and 2010. As a part of the settlement with FINRA, he consented to a 30-calendar-day suspension from associating in any and all capacities with any FINRA member firm, and a fine of $5,000.

Read this next

blockdag

BlockDAG Targets 20,000x ROI, Excels Beyond Litecoin’s Rise, and Enhances Ethereum Layer 2 Activity

Explore BlockDAG’s promising 20,000X ROI as it leads, with significant developments in Ethereum Layer 2 and a surge in Litecoin’s value post-Dencun upgrade.

Digital Assets

Hong Kong regulators approve spot Bitcoin and Ether ETFs

Hong Kong-based asset managers received approval from regulators on Monday to launch spot Bitcoin and Ether ETFs.

Digital Assets

Vitalik Buterin backs Railgun with $350K, RAIL price triples

Privacy cryptocurrency Railgun (RAIL) skyrocketed over 250% following a positive comment from Ethereum co-founder Vitalik Buterin.

Digital Assets

Uniswap hits $2 trillion in trading volume ahead of SEC’s lawsuit

Decentralized finance (DeFi) exchange Uniswap crossed $2 trillion in total trading volume despite escalating competition from other networks and regulatory setback.

blockdag

BlockDAG’s $17.3M Presale Success Elevates Security Beyond Ethereum Classic Value and Fantom Trends

Explore how BlockDAG’s advanced security with batch 9 entry and $17.3M raised outshines Ethereum Classic value and Fantom’s market moves.

Institutional FX

Finalto secures two prestigious awards at iFX EXPO LATAM 2024

Trading software and liquidity services provider Finalto received two accolades at the iFX EXPO LATAM 2024 held in Mexico City earlier this month.

Chainwire

SEABW Turns the Spotlight on Southeast Asia’s Flourishing Web3 Landscape With Over 40 Side Events and an All-encompassing Agenda

Southeast Asia Blockchain Week (SEABW), a premier blockchain conference exploring the evolving landscape of Web3 in the Southeast Asia region, is proud to announce that there will be over 40 side events, web3 meetups, workshops, and social gatherings.

Digital Assets

Landesbank Baden-Württemberg to offer crypto custody

Germany’s largest federal bank, Landsbanki Baden-Württemberg (LBBW), partnered with Austrian-based Bitpanda to provide “investment-as-a-service” infrastructure for cryptocurrencies. The new service will offer institutional and corporate clients the ability to store and procure digital assets such as bitcoin and ether.

Digital Assets

VALR Secures Regulatory Licenses from FSCA as a Leading Crypto Asset Service Provider in South Africa

VALR, the prominent crypto exchange backed by Pantera Capital and based in Johannesburg, has achieved a significant regulatory milestone by obtaining both a Category I and Category II license from the Financial Sector Conduct Authority (FSCA) of South Africa.

<