Financial Organizations Top Mobile Communications Risks and Concerns

Most companies are not prepared for the possibility that they may be required to search, extract and archive text messages from their employees’ mobile devices in litigation or an investigation. This is especially relevant to SEC and FINRA regulated industries where a higher record keeping and retention standard has been set. Your organization must be aware of these risks and be prepared for them. The best way to combat these risks is through monitoring and archiving mobile communications.

Employee’s Use of Text Messages

Employees are using mobile devices to communicate in new and innovate ways that can substantially benefit your financial institution; however, with this communication comes new risks that can damage personal reputations and cast organizations in a negative light.

Some of these risks include:

  • Sexual harassment
  • Money loss
  • Data leakage
  • Discrimination
  • Loss of productivity

You must be aware of these risks and be prepared for them. The best way to combat these risks is through monitoring and archiving mobile communications.

There are many regulations that require that mobile communications be archived, especially for financial institutions. Some of the important regulations and guidelines for archiving and retaining electronic communication are listed below. Compliance with these regulations will help your organization avoid fines, sanctions and other penalties, as well as avoid the risks involved with email, mobile and social media misuse.

  • FINRA 07-59 states that a firm’s electronic communications, including instant messages and text messages, are subject to overall supervisory review and procedures.
  • FINRA 11-39 – Firms are required to retain, retrieve and supervise business communications regardless of whether they are conducted from a work-issued device or personal device.
  • SEC 17a-4 states that all communications must be maintained, retained and available to be produced. This regulation was amended in 1994 to include electronic communications.
  • MiFID – European Union law that states that all electronic communications in regards to securities orders must be recorded.
  • FSA – United Kingdom published rules requiring firms to record and store relevant communication for six months.
  • Download this FREE PDF for more infomation on additional archiving laws and regulations for Financial organizations!

Text Message Archiving Case Law

Several recent cases have highlighted the need for capturing and archiving text messages. Case law shows that sanctions for not archiving text messages and providing them in for litigation or information request can result in fines, exclusion of evidence, or even case dismissal.

In 2014, the Seventh Circuit upheld nearly $1 million in punitive sanctions for the defendant’s failure to preserve the text messages, among other things imposed in In re Pradaxa. The court held that the defendant had a duty to suspend an auto-delete function that operated on potentially relevant text messages. The court found that the plaintiffs, through their definition of ‘‘document’’ in their requests for production, had requested the text messages

Another recent example, Calderon v. Corporacion Puertorrique de Salud, an employment discrimination case, the court held that an adverse inference instruction against the plaintiff was appropriate where the plaintiff had only selectively preserved relevant text messages between himself and a third-party. Defendants demonstrated that the plaintiff received 38 relevant text messages and sent numerous additional messages in response, but it did not produce any of these messages. As a result, the court held that it would give an adverse inference at trial against the plaintiff regarding the more than 38 missing text messages.

More recently, United States v. Vaughn, the Government in this criminal case failed to preserve text messages “related to its investigation of Defendants”. Specifically, the officer failed to adequately preserve text messages from four separate devices. As a result, the court ordered that the Government would be precluded from using any text messages in its case-in-chief and reserved judgment until trial regarding the propriety of an adverse inference instruction.
Challenges of Archiving Business Text Messages
Text messaging can pose significant challenges compared to e-mail, especially when viewed as a potential source of evidence. It can be difficult and very expensive to perform ediscovery, extract and collect text messages from mobile devices. E-mails can normally be easily obtained from company email servers and archives, most often do not require extraction from the user’s device and, if necessary, extraction is usually straightforward.

Retrieving text messages, by contrast, may require collecting the device from the employee—which can be challenging and can pose delicate privacy issues—as well as expensive forensic work, even for messages that have not been ‘‘deleted.’’

Additionally, when text messages do not go through company-managed enterprise servers or do not have any enterprise-based controls, companies may not be able to enforce records retention and legal hold policies for technical or logistical reasons. This is where third party archiving software excels.

The Complete Financial Compliance Archiving Solution

The advantage and convenience that new software technology provides you is not something that you can afford to miss! Your company’s future depends on its ability to adapt and implement these changes.

With Retain Mobile, companies have been able to fully benefit from new technology, while mitigating the risks involved. Retain archives all your business mobile communication data for iOS, Android and BlackBerry devices.

Archiving iPhones and iOS devices

Archive iPhones and iOS devices with Retain Mobile by separating corporate communication data from the employee’s own personal data. All encrypted SMS/Text messages and dedicated business phone number data is pushed from the secure server to Retain, via the Retain Collector. The Retain Collector then routes that data directly to the Retain Unified Archive. Additionally, Retain archives BBM Protected messages on iOS devices. This means there is no need to tether or sync the device and archiving is done in real time. Retain Mobile is the only enterprise-ready solution for iOS archiving.

Archiving Android Devices

Archive Android text messages and more with Retain Mobile. It operates through a lightweight app installed on each device. This app captures all SMS/MMS, and phone call log data and pushes it to the Retain archive. Secure communication, including encrypted SMS/Text messages and dedicated business phone number data, is pushed from the secure server, via the Retain Collector, to the Retain archive. Additionally, Retain archives BBM Protected messages on Android devices.

Archiving BlackBerry Devices

Retain Mobile captures all BlackBerry mobile messages via the BlackBerry Enterprise Service (BES). The data is pulled directly from the BlackBerry Enterprise Service itself. Retain archives Blackberry text messages (SMS/MMS & PIN), BlackBerry Messenger (BBM) & BBM Protected conversations, phone log data. It also provides policy-based mobile call recording and archiving, as well as auto-provisioning of new smartphone users.

Try Retain Mobile today!

All of these features for Retain Mobile allow your employees the freedom of choosing whichever device they want and to take full advantage of all their features. Let GWAVA bridge the gap between evolving corporate communication and compliance. We would love to provide you a FREE demonstration on how Retain works and offer you a free 30 day trial of our product!To avoid the risks of mobile communications and be in compliance with these regulations, GWAVA offers a solution to archive all mobile communication data for iOS, Android and BlackBerry devices.

Photo Credit: That was supposed to be going up, wasn’t it? by Rafael Matsunaga is licensed under CC BY 2.0

Que Mangus

Director of Product Marketing

Micro Focus

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