Deloitte Corporate Finance, LLC (DCF) has been served a $200,000 fine by FINRA after failing to properly archive messages. It is the second time the firm has been fined for failures related to messaging.

Between July 2017 and February 2022, DCF failed to retain business-related messages sent and received on 95 firm-owned Apple iPhones after users had communicated via Apple’s iMessage service.

DCF had established a system to prevent the use of iMessages, but failed to deploy it successfully on all the firms iPhones.

DCF found the issue

The firm came across the failings in its own compliance reviews in January 2022, when a DCF-registered representative drew attention to specific text messages that could not be found in the archiving system. These text messages were were found to have been iMessages, not SMS or MMS messages, and were therefore not archived by the firm’s third-party system.

DCF collected the iPhones it owned and discovered that only four of 99 iPhones had the iMessage function disabled.

By not obtaining the messages, DCF violated Section 17(a) of the Exchange Act, Rule 17a-4 of the Exchange Act, and FINRA Rules 4511 and 2010.

DCF has accepted and consented to the findings by FINRA, without admitting or denying them. FINRA has imposed a censure and a $200,000 fine on the firm.  

Blocking iMessage

DCF has now deployed a more robust blocking control to disable the iMessage service, and text messages are now sent as SMS or MMS messages, which are captured by DCF’s third-party service. The firm has also managed to upload 676,000 iMessages from those iPhones into the firm’s archiving system to perform a supervisory review.

DCF was also censured and fined $75,000 in December 2014, for failure to retain emails and internal instant messages over a six-year period.

Then, approximately 60,000 internal instant messages and 850,000 emails were lost due to a technical failure.