Relay Recap: Off-channel comms, AI as a solution, and individual accountability

Welcome to Relay Recap, your source for the latest regulatory developments and news!

While regulators seem to be entering an era of pro-innovation and reduced regulation, they are still sharpening their focus on individual accountability, off-channel communications, and failures in compliance oversight.

At the same time, AI and unified data systems are becoming powerful advantages in surveillance and governance. Single-vendor solutions that provide seamless data capture, structured data, and enable smarter monitoring are proving essential to firms looking to stay ahead of the regulatory curve and enact preventative measures against reputational risk and financial penalties.

This month, we take a look at renewed fines for off-channel communications and social media-based promotions, as well as how AI-enabled solutions are now becoming a commercial advantage in light of new rules from the U.S. Department of Justice.

$15,000 FINRA fine for concealing profit-sharing via off-channel communications

The Financial Industry Regulatory Authority (FINRA) has fined and suspended a former Charles Schwab representative $15,000 for concealing an unauthorized profit-sharing agreement. The representative was found to have exchanged “thousands” of messages relating to trades and profits, and with no hard proof of these conversations, the firm was also fined for being in breach of regulatory rules around recordkeeping. Off-channel communications remain an issue, and regulators will weed it out.

Read more now: https://tinyurl.com/2cj8737z

FCA Survey finds 178 WhatsApp policy breaches, with over 41% from senior staff

A Financial Conduct Authority (FCA) survey has found 178 instances where individuals used unapproved communication channels for business purposes. Concerningly, 41% of WhatsApp policy breaches came from senior staff. If those at the top are not following the rules, how can firms expect the rest of their employees to behave compliantly? Click here to find out more: https://tinyurl.com/2jhe8zc9

Watch our latest Regulatory Wrap episode for more details:

FCA and FINRA take on individual accountability in midst of red tape reduction

There has been a notable shift from regulators, globally, towards pro-innovation and deregulation. Because of this, the number and rate at which fines have been imposed have seen a decrease. At the same time, however, there has been a greater call for individual accountability. Commenting on this, Global Relay’s Senior Manager, Regulatory Intelligence, Ryan M. Sheridan , stated: “At the core of these penalties is individuals breaching regulations or policies and procedures. Recent developments indicate that regulators are focusing in on bad actors to root out abusive behavior and ensure investor protection.”

Misconduct is no longer just an issue for firms, but for the individuals taking part. Find out more: https://tinyurl.com/4pcahh77

The Department of Justice has revised its Corporate Enforcement Policy

Our latest whitepaper delves into the effects of the DOJ’s revision to its CEP, making self-reporting ‘in good faith’ and full cooperation with the regulator a must for firms looking to reduce pending penalties. As regulators increasingly look to reward firms who self-report noncompliance, surveillance solutions are becoming a commercial advantage.

Read the whitepaper now: https://tinyurl.com/2kautrkp

The truth about AI in communication surveillance

Artificial intelligence is transforming the world we live in, and surveillance is no exception. From false positive reduction to sentiment analysis, risk detection has become that much easier. However, concern persists, and to tackle this we are breaking down and debunking the most common myths around AI.

Learn more here: https://tinyurl.com/5h4hdwwh

Where does your data go when you use Global Relay’s AI-enabled surveillance?

Our latest infographic details how your data securely moves through Global Relay’s closed and complete system, meaning your data is safe, secure, and never passed to third parties.

Click here to view it now: https://tinyurl.com/3rwune2m

FDA takes aim at pharmaceuticals’ social media activity

Misleading advertising and social media risks are not just limited to financial services. The Food and Drug Administration has issued letters to pharmaceutical companies for posting misleading advertisements via influencers too. Companies must proactively monitor channels for improper use.

Find out why: https://tinyurl.com/yn9fmed3

Are we entering a new era of deregulation?

Global Relay’s Director of Regulatory Intelligence, Rob Mason , explores how although regulators globally may be moving towards an era of deregulation, this does not mean they are withholding from seeking out misconduct and fining firms for off-channel communications.

Read more on the topic now: https://tinyurl.com/yc2fsfxh

The Conduct Chronicles – SEC Renegotiation? Not a chance!

Emma Parry 's latest edition of The Conduct Chronicles explores how regulators are reviewing and simplifying regulatory processes for good economic outcomes. However, while regulators look to reduce complexity, this may not mean they will revisit and amend previous sentences.

Learn more: https://tinyurl.com/yeywxjeu