A former broker for B. Riley Wealth Management has been sanctioned for rules violations pertaining to the use of his personal email, according to Advisor Hub.
Washington, D.C.-based Roger D. Follis was fined $10,000 and suspended for 45 days by the Financial Industry Regulatory Authority over his actions in the matter.
FINRA found that between 2020 and 2023, Follis used an unapproved personal email account to send over 1,900 emails to a customer. The messages included investment recommendations and information about the customer’s portfolio investments and balances. Some emails contained complaints against Follis by the customer about activity in his account. Follis did not disclose his use of his personal email account to B. Riley.
Company policy prohibited employees from using personal email accounts for business-related communications, instead requesting that any electronic business conversations be conducted using firm-sponsored systems. The company also had policies in place requiring employees to report any customer complaints for further review, as required by FINRA Rule 4530, which Follis allegedly disregarded.
Follis’s failure to communicate using business-approved channels also caused B. Riley to violate several recordkeeping rules applicable to all registered firms and members, including the Securities and Exchange Commission’s Rule 17a-4 on recordkeeping and the preservation of communications. In turn, this also violated FINRA Rules 2010 and 4511:
Rule 4511 involves mandatory recordkeeping requirements, necessitating that member firms maintain accurate and complete records in a format the complies with SEC Rule 17a-4. Original copies of electronic records must be kept for a minimum of three years.
Rule 2010 requires that members observe high standards of commercial honor as well as just and equitable principles of trade in the conducting of their business.
Follis did not admit or deny FINRA’s findings but accepted and consented to the penalties. FINRA launched its investigation after B. Riley filed a U5 termination form regarding Follis in February. The firm said he was fired for failing to communicate with clients in “a firm-approved manner” and “to timely report a customer complaint,” as well as having submitted “incorrect information in compliance questions,”
Follis said in a comment appended to the disclosure that the allegations only arose after he was already in process of “resigning due to turmoil at B. Riley.” He said he and his business partner were terminated before they could submit their official resignations.
A spokesperson for B. Riley did not respond to a request for comment. The firm, based in Memphis, Tennessee, sold its employee channel to Stifel Financial earlier this year but kept its independent channel.
In another matter from last April, Follis paid $1.75 million to settle a customer complaint filed in 2023 that sought $2.6 million based on allegations of a “misunderstanding of asset allocation during the pandemic volatility.” Follis wrote in a comment that the “ultra-high net worth client” had “consistently performed well,” and noted that his portfolio generated more than $2 million in profit in 2019.
“The client admitted in writing there was no wrongdoing involved,” Follis wrote. “I settled for two reasons: avoid the costs of litigation and focus on our growing business.”
Follis joined B. Riley in 2020 from Wells Fargo’s independent channel and is now registered as a broker and investment advisor with A.G.P./Alliance Global Partners.
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