FINRA announced last week that it had fined 12 firms a total of $14.4 million after finding that they failed to preserve their electronic records properly.
FINRA sanctioned the following firms:
This flurry of year-end fines cements FINRA's oft-stated focus on ensuring that the ever-rising volume of electronic records that Broker-Dealers must keep are retained in a complete and accurate format so that regulators can properly conduct periodic examinations. FINRA Rule 4511 requires that books and records required to be made or kept pursuant to its rules be preserved in compliance with SEC Rules 17a-3 and 17a-4, which mandate that such records be kept in accordance with "write once, read many" (WORM) standards.
Here's a shock: none of the firms admitted FINRA's charges, but each consented to the entry of FINRA's findings. FINRA found that each firm had procedural and supervisory deficiencies that impeded their obligation to properly retain and preserve electronic records.
Interestingly, FINRA made no allegations that hacking occurred in any of the firms, or that the firms lost or allowed records to be altered.
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