by Avi Gesser, Jeff Robins, Chana Zuckier, and Julie M. Riewe
At many companies, employees are increasingly using non-business communication applications (“apps”) such as iMessage, WhatsApp and WeChat for business-related communications. This trend has likely accelerated in the COVID era, as work-from-home arrangements blur traditional lines between “business” and “personal” time and many conversations that were normally held in person are now done virtually. A recent SEC enforcement action highlights the risk that these communications pose for companies subject to strict record retention requirements, such as broker-dealers pursuant to Rule 17a-4 under the Securities Exchange Act, as well as FINRA Rule 3110 and related guidance, as well as and investment advisers subject to Rule 204-2 and related guidance under the Investment Advisers Act of 1940. But it also highlights the risks that these communications pose more broadly for companies, and the need to consider adopting technologies and policies that reduce these risks.