John C. Shen (also known as Cong Shen), of Dedham, Massachusetts, a stockbroker registered with LPL Financial LLC, has been fined $5,000.00 and suspended for 30 days from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity because Shen used an unapproved social media platform to communicate about his securities business during the time that he was associated with LPL Financial. Letter of Acceptance, Waiver, and Consent No. 2020067994801 (September 6, 2024).
FINRA Rule 4511 requires securities broker dealers and their representatives to maintain proper records of communications related to their business. This includes preserving copies of all messages sent or received through various communication platforms, such as email or text messages, for a certain period. The rule helps to ensure that securities broker dealers maintain complete records, which can be reviewed during audits or investigations.
According to the AWC, Shen used WeChat, an unapproved communication platform, to interact with his customers about securities-related topics. Between December 2018 and August 2021, Shen used WeChat to promote investment seminars, answer customer questions, and share details about structured notes sold through his firm, LPL Financial LLC. However, LPL Financial did not approve WeChat for business communications, and Shen failed to retain copies of these messages or provide them to his firm. This meant that LPL could not fulfill its regulatory obligation to keep records of all business-related communications.
Additionally, Shen falsely reported in 2019 and 2020 compliance questionnaires that all his electronic communications were through his firm’s approved email platform. He was also personally warned in November 2019 not to use unauthorized messaging platforms, yet he continued to do so. This caused the securities broker dealer to be non-compliant with record-keeping rules.
FINRA found that Shen violated Rules 4511 and 2010.
Shen was associated with LPL Financial LLC in Dedham, Massachusetts from September 22, 2014, to November 19, 2021, as an investment advisor representative. Shen was associated with LPL Financial LLC in Dedham, Massachusetts from April 17, 2012, to November 19, 2021, as a stockbroker. Since November 30, 2021, Shen has been associated with NI Advisors in Dedham, Massachusetts, as both a stockbroker and investment advisor representative.
