Investment Placement Group (IPG) has agreed to pay a fine of $100,000 as a part of a settlement with the Financial Industry Regulatory Authority (FINRA).

Beginning in January 2020, IPG permitted employees to use a vendor-provided electronic instant messaging platform for business purposes.

However, between January 2020 and November 2022, IPG failed to establish, maintain, and enforce a supervisory system, including written supervisory procedures (WSPs), reasonably designed to achieve compliance with the firm’s obligation to preserve and review business-related communications sent and received through the approved messaging platform.

In January 2020, the firm engaged a third-party vendor to capture the messages its employees sent and received so that the firm could preserve and review them. In order for the archiving service to capture messages sent and received by an employee through the messaging platform, the employee’s personal device had to be connected to the archiving service.

The firm, however, did not take reasonable steps to verify that its employees’ devices were in fact connected, and remained connected, to the archiving service, and that employees’ messages sent and received through the messaging platform were in fact being captured by the archiving service.

Moreover, the firm’s WSPs did not address the use of the messaging platform or describe how principals at the firm should verify that employees’ devices were connected, and remained connected, to the archiving service.

During the relevant period, the IPG employees who were authorized to use the messaging platform either were never connected to the archiving service or were connected for only a portion of the time. An unknown number of business-related messages of employees were, therefore, never preserved or reviewed by the firm.

Moreover, the firm was unable to produce all messages responsive to a FINRA request in connection with the review of a customer complaint.

Therefore, IPG violated Exchange Act § 17(a), Exchange Act Rule 17a-4, and FINRA Rules 4511, 3110, and 2010.

On top of the $100,000 fine, the firm has agreed to a censure and an undertaking that a member of its senior management who is a registered principal of the firm must certify in writing that the firm has remediated the issues and implemented a supervisory system, including WSPs, reasonably designed to achieve compliance with Exchange Act § 17(a), Exchange Act Rule 17a-4, and FINRA Rules 4511 and 3110.