A securities corporation in California was recently censured and fined for a variety of violations related to their WSPs.
“Representatives were able to maintain business-related pages on a social media site that had not been preapproved by a qualified registered principal. As a result of the firm not reasonably monitoring for usage of undisclosed websites, it failed to preapprove websites operated by representatives as required by its WSPs.”
The Securities Corporation’s WSPs required that the firm conduct a weekly review of registered representatives' social media sites that had been disclosed to the firm. Notwithstanding the firm's WSPs, this firm failed to conduct such a review 22 times out of a sample of 26 weeks reviewed by FINRA.
Additionally, during this audit period, the firm's WSPs required that a registered representative receive preapproval for a webpage on a business-related social media site. Because the firm did not have a reasonable system to monitor for compliance with its social media policies. 38 registered representatives were able to maintain business-related webpages on a social media site that had not been preapproved by a qualified registered principal. Additionally, because the firm did not reasonably monitor for usage of undisclosed websites, the firm failed to preapprove four websites operated by registered representatives as required by the firm's WSPs.
It can become very time consuming for a CCO to manually perform weekly reviews on advisors' websites and online presence. Automation is the key to any compliance program and that is where SiteQuest Compliance is able to assist you on a variety of fronts.
We often hear from CCOs Eagle Eye uncovers undisclosed social media accounts.
How are you to supervise these accounts when you don’t even know about them in the first place?
That is where our Eagle Eye application comes in to support your internet supervision methods. With “Eagle Eyes”, our application will help you search, discover, and document your advisors’ online presence. This includes undisclosed social media accounts, websites, blogs, and more. With customizable workflows this application will help you approve, or flag for further review each discovery.
This firm was also cited and fined for failing to monitor websites, and for not pre-approving websites operated by their representatives. SiteQuest Compliance brings you years of experience when it comes to web crawling, monitoring, archiving, and website analysis with our SQWatcher application.
SQWatcher can monitor websites hosted on your network, or an outside hosting systems. We would love to personally demonstrate how our applications will support and enhance your supervision processes.
Let us show you how it is done. Schedule your personalized demo today.
Source: (FINRA Case #2015047824201)
Are you ready for the February 1, 2020 implementation deadline?
In 2019, the New York Department of Financial Services (DFS) announced an amendment to the “New York Insurance Regulation 187” that affects annuities and life insurance sales.
“It requires insurers to establish standards and procedures to supervise recommendations by agents and brokers to consumers with respect to life insurance policies and annuity contracts issued in New York State so that any transaction with respect to those policies is in the best interest of the consumer and appropriately addresses the insurance needs and financial objectives of the consumer at the time of the transaction.” (DFS Press Release)
What does this mean for compliance supervisors? For firms issuing annuities, they must now do an online review for names and titles used by the registered representative that are selling their products in the State of New York.
“An insurer shall establish, maintain, and audit a system of supervision that is reasonably designed to achieve the insurer’s and producers’ compliance with this policy.” (Section 224.6)
Eagle Eye is already the partner of choice for many firms when it comes to supervising a registered representative’s online presence. With this updated rule, those utilizing our Eagle Eye application have a tool in place that monitors for this new regulation.
Consider partnering with Eagle Eye. For 10 years, SiteQuest Compliance is a trusted supervision and compliance partner. Let us show you how our application will save you time while streamlining your supervision processes and automatically documenting and reporting on your findings.
Contact us today to schedule your personalized demo.
About James Cella
James Cella is the President of a growing and innovative compliance technology provider called SiteQuest Compliance. James is a customer-centric individual and focuses on building and sustaining positive and lasting relationship with his clients and partners. James and his family are "super fans" of University of Utah Football and have attended nearly every home game since 2002. Go Utes!