BD REP BARRED FOR CAUSING RECORDKEEPING VIOLATIONS

The SEC barred a Rep from the industry for aiding and abetting his firm’s recordkeeping violations by deleting e-mails, hiding records, and using private e-mail and IM accounts in violation of the firm’s policies. The SEC had requested certain records as part of an investigation. The BD failed to produce those records because he had deleted them and/or had utilized private e-mail and IM accounts that the BD failed to monitor. The SEC sanctioned the BD for violating Section 17(a) and Rule 17a-4(b)(4), which require the preservation of communications records for three years.

OUR TAKE: The SEC, by charging the Rep with aiding and abetting, is saying that a Rep has an independent duty under the securities laws to assist his/her firm to comply with the firm’s policies and applicable law.

http://www.sec.gov/litigation/admin/2008/34-58403.pdf