← Broker database 2022-12-14
OFG Financial Services Fined $45,000 for Email Supervision Failures
According to FINRA, OFG Financial Services, Inc. was censured, fined $45,000, and required to remediate the issues identified and implement a reasonable supervisory system for reviewing electronic communications.
The firm failed to establish, maintain, and enforce a reasonable supervisory system, including Written Supervisory Procedures, to review electronic communications that its registered representatives sent and received. The firm's WSPs did not identify the personnel responsible for searching or reviewing emails, state how frequently reviews should occur, or provide any information about the sample size for email review. Additionally, the WSPs did not specify any keywords or process for identifying keywords to flag emails for review or describe any parameters for conducting random sampling. The procedures also did not describe any types of red flags or issues that would require follow-up steps from reviewers or any steps for escalating issues identified during email review.
The firm's email review was also unreasonable in practice. The keywords the firm used to flag emails for review included the firm's own name, which appeared in virtually all its emails. Furthermore, the firm only reviewed a small fraction of the emails contained in the random sampling identified for review. As a result, the firm reviewed only 0.26 percent of the emails that its representatives sent or received.
This case illustrates the inadequacy of minimal email supervision in the securities industry. Electronic communications are a primary method through which representatives interact with customers and conduct business. Without adequate review procedures, firms cannot detect potential misconduct, unsuitable recommendations, or misrepresentations made to customers via email.
Investors should understand that proper email supervision is an important safeguard. If you have concerns about communications with your broker, document all interactions and save copies of emails. Lack of proper supervision increases the risk that problematic conduct may go undetected.