← Broker database 2025-06-23
Mingzhe Du Fined $7,500 and Suspended Two Months for Off-Channel Communications
According to FINRA, Mingzhe Du was fined $7,500, suspended from association with any FINRA member in all capacities for two months, and required to complete five hours of continuing education concerning recordkeeping responsibilities.
The findings revealed that Du caused his member firm to maintain incomplete books and records by being included on messages relating to the firm's business that were neither supervised nor retained by the firm. The conversations occurred on an unapproved social media platform and consisted of thousands of messages to or from other firm personnel, including senior executives, and firm customers.
The messages covered topics including customers' accounts and trading, trade surveillance and related compliance concerns, and regulatory requests. Because these communications occurred through unapproved channels, the firm failed to maintain these messages as required by the Exchange Act and FINRA rules.
Securities regulations require firms to retain business-related communications to enable regulatory oversight and to ensure that records exist if disputes arise between customers and firms. When communications occur through unapproved channels, these important protections are circumvented.
The fact that the messages included discussions of trade surveillance and compliance concerns is particularly troubling, as it suggests that matters relating to regulatory compliance were being discussed outside of proper channels. Similarly, communications with customers about their accounts and trading should occur through supervised channels to protect both the customer and the firm.
The suspension is in effect from July 21, 2025, through September 20, 2025. This case is part of a broader regulatory focus on off-channel communications in the securities industry, which has resulted in significant fines for many firms and individuals.
For investors, this case reinforces the importance of communicating with brokers through official firm channels, where communications are supervised and retained.