An affiliated group of broker-dealers agreed to pay a $1.2 Million fine for failing to retain and review e-mails.  FINRA alleges that the firms failed to review nearly 6 million e-mails that their systems flagged for supervisory review.  According to FINRA, the firms’ systems’ default settings removed e-mails from the review queue after a certain period of time even if the e-mails had not been reviewed.  FINRA also charges that the firms failed to properly archive e-mails housed on third party servers and failed to properly set up other accounts for review.

OUR TAKE: The sheer numbers involved here show how hard it is for firms to comply with the e-mail retention and review requirements.  We believe the regulators should consider some bright line tests around e-mail reviews that make sense in an electronic world.