$9 Million Regulatory Fine For Failure To Keep Emails:
Retaining and accessing email records is important for any organization. In the case of highly regulated industries, such as brokerage firms, failing to maintain the necessary technology to do so can result in compliance-related penalties.
Last month, the Financial Industry Regulatory Authority (FINRA) announced $9 million in fines against LPL Financial LLC. FINRA found 35 separate instances of email failures over the past six years, which rendered LPL Financial unable to access and review millions of email messages.
FINRA’s specific charges of non- compliance included failure to supervise 28 million messages to and from independent representatives doing business as LPL Financial, as well as failing to archive email sent to customers via third party advertising platforms. LPL Financial neither admitted nor denied the charges, but agreed to the entry of FINRA’s findings.
According to FINRA Chief of Enforcement Brad Bennett: “As LPL grew, it did not expand its compliance and technology infrastructure; and as a result, LPL failed in its responsibility to provide complete responses to regulatory and other requests for emails. This case sends a strong message to firms to make sure your business does not outgrow your compliance systems.” For FINRA’s press release, go here.
Contact us at Ossian Law P.C. regarding social media law or any other information technology law question.