Wall Street Regulators’ New Target: Emojis

Texts tend to be shorter than emails and include more acronyms, so maintaining a surveillance system that interprets messages and identifies red flags could be more complicated, said Michael Solomon, who leads Finra’s national examination program, at a panel at the Finra Annual Conference in May.

“Emojis are something that didn’t exist in emails before,” said Solomon. “You can foresee situations in text messaging where an emoji might be a 4530 customer complaint.” 

The 4530 reporting requirement asks Finra member firms to keep records of all internal correspondence and business communications with customers and to file reports promptly to Finra when firms uncover possible misconduct in the communications or receive written customer complaints.

Emojis, which are used more often in texts but are also seen in emails, can complicate the meaning of a message, Solomon said at the conference. For instance, if a client texts a financial adviser saying “that recommendation” followed by an angry, upset emoji, the brokerage firm needs to think about what that message means from a reporting perspective and what it should then do with that information, Solomon said.

Solomon’s comments at the conference, which likely marked the first time a Finra regulator spelled out the need to supervise the use of emojis, prompted the audience to chatter and groan, said Brian Rubin, a partner at law firm Eversheds Sutherland who attended the panel.

A spokesman for Finra said in an email last week that Solomon “was merely encouraging firms to think differently and more broadly about how to supervise texting,” now that many firms allow texting as a means of communication with customers. Finra didn’t make Solomon available for additional comment. 

The focus on texting and emojis comes amid a push by U.S. regulators to better supervise business communications, and it reflects the broader changing lexicon toward the use of the little drawings that substitute for words in everyday communications. 

Off-channel communications—those that take place outside a firm’s formal, approved methods—have been a focal point for Wall Street regulators, including the Securities and Exchange Commission and the Commodity Futures Trading Commission, for the past few years.

Eleven of the world’s largest banks and brokerages in September agreed to collectively pay $1.8 billion in fines to resolve regulatory investigations over their employees’ use of messaging applications that broke record-keeping rules. Last week, ’s brokerage arm agreed to pay $4 million in a settlement with the SEC after the accidental deletion of 47 million electronic messages it was supposed to retain. 

The growth in the use of emojis in financial communications comes as more individual investors rely on social media or other, more informal channels to connect with each other on trading of meme stocks or cryptocurrency, according to Tony Sio, the head of regulatory strategy and innovation for Nasdaq’s anti-financial-crime division. Some of that more informal communication behavior is bleeding out into the traditional markets as well, he said. 

There is no prohibition on using emojis in business communications, but for firms to comply with the need to monitor the use of emojis, they potentially face both software and interpretation challenges, industry participants said. More than 3,600 emojis are available on

“It’s really hard to understand what is the true meaning of these emojis that are coming out,” Sio said. “It’s not like you can look them up in the Oxford dictionary.” 

In one recent case against the issuers of nonfungible tokens known as “NBA Top Shot Moments,” a federal judge ruled these NFTs were securities, citing emojis used by the issuers in their tweets. Representatives for the issuer, Dapper Labs, didn’t immediately respond to a request for comment. 

“And although the literal word ‘profit’ is not included in any of the tweets, the ‘rocket ship’ emoji, ‘stock chart’ emoji and ‘money bags’ emoji objectively mean one thing: a financial return on investment,” U.S. District Judge Victor Marrero wrote in the February decision for the U.S. District Court for the Southern District of New York in Manhattan.

Firms generally have software in place to review electronic communications, but some say it remains difficult for software to read an emoji and to understand the meaning behind it. 

Third-party vendors that provide technology for firms to capture and supervise electronic communications have been looking into this issue, according to Chip Jones, an executive vice president at Global Relay, a company that provides e-communications compliance products for brokerage firms. Global Relay’s platform can capture more than 100 different types of communication channels that financial firms might use, but it is ultimately up to the firms to decide what kind of emojis might be flagged, he said. 

Global Relay is looking into training artificial intelligence to read and automatically detect problematic messages the contain emojis, but financial firms right now still need staffers to look at individual messages with emojis to interpret their meaning, according to Jones. That process may include a call to the employees that sent the messages, he said.

“Because emojis do carry meanings, and emojis do mean something in the context of electronic communications and firms should have the ability to supervise that,” said Jones, who previously spent about 20 years at Finra’s member relations team. 

Write to Mengqi Sun at [email protected]