FINRA Fines Thrivent Investment Management $325,000 Over Supervisory Failures

The Financial Industry Regulatory Authority (FINRA) has taken disciplinary action against Thrivent Investment Management Inc. for failing to establish and maintain a supervisory system reasonably designed to detect potential signature forgery or falsification of electronic signatures.

According to the findings detailed in FINRA's disciplinary letter, from July 2017 to the present, at least 15 Thrivent registered representatives electronically signed at least 120 customer names on over 260 documents, including required books and records like account records and trade memoranda.

Failure to Reasonably Supervise Electronic SignaturesFINRA found that while Thrivent's written supervisory procedures required authenticated customer signatures, the firm lacked any procedures to reasonably supervise the use of electronic signatures by its representatives.

The firm did not provide guidance to supervisors on identifying red flags that could indicate falsified or forged electronic signatures, such as documents sent from rep email addresses, authentication codes sent to rep phone numbers, or instances where customer and rep signatures originated from the same IP address.

As a result, Thrivent failed to detect or investigate these red flag scenarios, missing opportunities to identify cases where representatives improperly signed customer names on firm documents electronically.

Violations and SanctionsBy failing to have a reasonably designed supervisory system for electronic signatures, FINRA found that Thrivent violated rules requiring adequate supervision, as well as recordkeeping rules requiring accurate books and records.

To resolve this matter, Thrivent was censured and fined $325,000. The firm also agreed to certify within 120 days that it has implemented reasonable supervisory procedures and systems regarding the issuance of detecting potential electronic signature falsification or forgery.

This action underscores FINRA's expectation that broker-dealers maintain reasonable supervision and controls when allowing remote electronic signature processes for customer documents and transactions.

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