A St. Louis-based brokerage firm has agreed to pay a steep penalty after regulators said it failed to police the digital breadcrumbs left by its employees. In a settlement announced Friday, Broker-Dealer Fined $750K headlines the case as Benjamin F. Edwards & Co. Inc. consented to a censure and a $750,000 fine to resolve allegations brought by the Financial Industry Regulatory Authority.
At the heart of the matter: business-related text messages that slipped beyond the firm’s compliance net.
FINRA: Supervisory Gaps Spanned Four Years
According to a letter of acceptance, waiver and consent issued Friday, FINRA alleged that from October 2019 through December 2023, Benjamin Edwards did not reasonably supervise employees’ text messaging or preserve business-related communications sent via text. The regulator said the lapses violated the Securities Exchange Act of 1934 and associated FINRA rules.
The regulator declined to comment Monday. Counsel for Benjamin Edwards did not immediately respond to a request for comment.
FINRA said the case emerged from its review of a January 2022 arbitration award. The firm, the regulator found, lacked any system to monitor compliance with its own written policies that broadly prohibited employees from conducting firm business by text message.
