Large Broker-Dealer Pays $6.5 Million for Compliance Mishaps
A large broker-dealer agreed to pay FINRA $6.5 Million to settle charges that it violated recordkeeping, fingerprinting, and reporting requirements. FINRA alleges that the firm failed to properly store and safeguard over 87 million electronic records, including 1.5 million records lost by a third-party vendor. FINRA also faults the firm for failing to fingerprint more than 7,000 non-registered associated persons, most of whom worked in an IT capacity outside the U.S. Also, the firm failed to scrub certain consolidated reports before allowing client access. In addition to the fine, the firm agreed to retain an independent compliance consultant.
Compliance is not intuitive. Regulated entities have to follow a plethora of esoteric laws and regulations that compliance professionals spend years learning and applying. Trying to wing it with good intentions won’t satisfy the regulators.