FINRA Fines, Suspends Rep Over WhatsApp Messages

Nonetheless, during this period, “Rivero used WhatsApp to exchange hundreds of securities-related messages with six firm customers. These messages included, among other things, obtaining authorization to buy and sell stocks, discussions about account performance, and discussions related to the customer complaint and customer loan,” FINRA said.

In 2020, Rivero “falsely attested that he did not use unapproved messaging services such as WhatsApp for business-related communications,” according to the order.

Rivero also attempted to settle a customer complaint without the knowledge or consent of his firm. Jefferies’ written supervisory procedures required registered reps “to escalate customer complaints to managers and prohibited representatives from settling complaints that had not been disclosed to the firm,” the order states.

In April 2021, a customer, who was also Rivero’s former brother-in-law, complained to Rivero about losses in his account from investments in nontraditional exchange-traded funds, the order explains.

“Rivero offered, via WhatsApp, to reimburse the customer over $300,000 in monthly installments of $10,000 to resolve the complaint. Rivero did not disclose to Jefferies the customer’s complaint or Rivero’s attempt to settle with the customer,” the order states.

“However, Rivero did not reach a settlement agreement with the customer or make any payments to him. Ultimately, the customer filed an arbitration claim against Jefferies and Rivero,” according to FINRA.

FINRA fined Rivero $15,000 and suspended him for six months.