FINRA Is Still Following Off-Channel Enforcement Even If the SEC Isn’t Leading

Key Takeaways

• FINRA fined Velox Clearing $1.3 M for 10,000 unretained WeChat messages.
• Individual brokers face personal bans for off‑channel messaging deletions.
• 2026 FINRA oversight report cites record‑keeping failures over 50 times.
• Mid‑market firms remain vulnerable despite reduced SEC headline enforcement.
• Strong supervision programs now essential to avoid FINRA examination penalties.

Pulse Analysis

The regulatory landscape for broker‑dealers has shifted dramatically since 2021, when the SEC and CFTC made off‑channel communications—such as WhatsApp or WeChat chats—a primary enforcement focus. Hundreds of millions in fines were levied on institutions that failed to capture, retain, or supervise these informal channels. With the new administration pivoting toward fraud and investor harm, the SEC’s public enforcement tempo has slowed, leading many firms to assume the risk has evaporated.

In reality, FINRA has kept the pressure on. Operating on its own examination calendar, FINRA issued a $1.3 million sanction against Velox Clearing in mid‑2025 for more than 10,000 unretained WeChat messages, alongside a $500,000 SEC penalty for the same breach. Subsequent actions have targeted individual brokers, imposing bans and personal fines for deleting off‑channel evidence. The 2026 FINRA oversight report underscores this trend, citing record‑keeping failures over 50 times and emphasizing the need for robust supervision programs that align written policies with daily practice.

For compliance officers, the message is clear: the absence of SEC headlines does not equal safety. Mid‑market firms, which escaped the SEC’s billion‑dollar wave, now sit squarely in FINRA’s crosshairs. Investing in automated capture tools, regular audits of personal device usage, and clear accountability for senior management can mitigate the risk of costly examinations. As FINRA continues to prioritize off‑channel enforcement, firms that proactively strengthen supervision will avoid penalties and protect both their reputation and bottom line.