According to FINRA, Deloitte Corporate Finance LLC was censured and fined $200,000 for failing to retain business-related Apple iPhone-to-iPhone messages (iMessages) sent and received by its registered representatives on firm-owned iPhones.

The firm permitted personnel to use text messages for work-related purposes on firm-owned mobile phones. However, iPhones automatically create end-to-end encrypted iMessages that the firm's third-party archiving system could not capture. Knowing this, the firm sought to disable or block the iMessage function on issued iPhones so that text messages would be sent as retainable messages and archived by the firm's third-party service.

While attempting to apply the disabling control to new employees' iPhones, firm personnel noticed the control was not working on new iPhones, possibly due to an issue with a new version of the iPhone operating system. The individual coordinating deployment of the iMessage disabling control left the firm, and that person's responsibilities were not fully transitioned to a new person. As a result, the blocking control ceased working or was never applied on an increasing number of firm-owned iPhones.

The issue came to light when a representative referenced specific text messages that the firm could not find in its archiving system. Upon investigation, the firm learned these were iMessages that were not being archived. The firm then collected firm-owned iPhones from its representatives and uploaded iMessages into its archiving system for supervisory review. Only four of the collected iPhones had the iMessage function disabled, meaning many firm-owned iPhones were not compliant with the original blocking control.

This case highlights the importance of firms maintaining effective recordkeeping systems that can adapt to evolving technology. Firms must ensure proper archival of all business communications to comply with regulatory requirements and protect investors.