FINRA Fines BD $1.2 Million Because It Lacked System to Review E-Mails

FINRA fined a large broker-dealer and its affiliates $1.2 Million for failing to establish an adequate e-mail review system. Although the firm had written procedures mandating e-mail review, the firm had no electronic system in place that allowed direct monitoring of e-mails. Instead, the brokers themselves were required to forward e-mails to supervisors to review, and supervisors were “encouraged” to inspect brokers’ computers. FINRA’s Enforcement Director, Susan Merrill, said that “Relying on brokers to provide copies of their own emails to supervisors for review is hardly an effective means to detect such misconduct.” FINRA further alleges that an effective e-mail review system would have uncovered outside business activities that resulted in customer harm.

OUR TAKE: Several commercial vendors offer electronic e-mail review systems for a reasonable price. Get one.

http://www.finra.org/Newsroom/NewsReleases/2009/P120393