OFG Financial Services, Inc. has agreed to pay a fine of $45,000 as a part of a settlement with the Financial Industry Regulatory Authority (FINRA).
From November 2017 to November 2022, the firm’s written supervisory procedures (WSPs) concerning review of its registered representatives’ electronic communications were not reasonable. 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.
In addition, the WSPs did not specify any keywords or process for identifying keywords to flag emails for review. Nor did the WSPs describe any parameters for conducting random sampling. Further, the WSPs 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 during this period. The keywords the firm used to flag emails for review included the firm’s own name, which appeared in virtually all its emails. In addition, 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% of the emails that its registered representatives sent or received from November 2017 to December 2021.
Therefore, the firm violated FINRA Rules 3110 and 2010.
In addition to the fine, the respondent has consented to a censure.
