FINRA fined two major financial services firms for email-related failures related to "supervisory and reporting violations" and "investigations of broker misconduct."
The Financial Industry Regulatory Authority (FINRA) fined Piper Jaffray & Co $700,000 for violations related to its failure to retain around 4.3 million emails from November 2002 through December 2008. Moreover, Piper Jaffray failed to inform FINRA of its email retention and retrieval issues, which affected the firm's ability to comply with email extraction requests from FINRA. FINRA only discovered the issue within Piper Jaffray's email system when investigators requested emails sent and received by a former firm employee suspected of misconduct.
FINRA also charged LPL Financial LLC with email violations that cost the firm $7.5 million, which is the largest fine ever brought by FINRA exclusively for email violations. FINRA said that LPL grew its business and failed to devote sufficient resources to update its email system. It also said the email system became increasingly complex and unwieldy and the firm had many systematic failures that prevented access to hundreds of emails from 2007 to 2013. Both firms handled the accusations of their email misconduct differently.
To settle the issue, Piper Jaffray neither admitted nor denied the charges but consented to FINRA's findings. On the contrary, LPL reported the issues relating to the surveillance of emails and cooperated fully. They since have undertaken a comprehensive redesign of their email system.
It's critical for organizations to easily access documents, emails and even text messages. If those forms of information are deleted without being properly preserved, they could be lost forever. This poses an issue when a company needs to provide these records to aid regulatory compliance, a legal suit or an employee dispute.
There have been countless examples of how an archiving system has impacted a company, both negatively and positively. Being able to easily access archived documents, emails and messages takes the guesswork out of certain situations and will ultimately protect your company if used correctly. Greg Arnette, founder and CTO, Sonian, a pioneer in cloud-powered archiving, has identified nine situations in which having records accessible, or not having records accessible, has largely affected companies and employees.
Even with the many challenges of managing today's complex IT environment, it's possible to achieve continuous compliance through proper organization, thorough processes and technology automation. ... More >>