A firm settled FINRA charges for failing to journal approximately 6 million emails to its correspondence review platform. FINRA stated that this failure affected more than three quarters of the firm's employees who were subject to supervisory review.
In a Letter of Acceptance, Waiver and Consent, FINRA found that following an email server switch in January 2014, the firm did not conduct an initial test to ensure that the existing process of journaling employee emails was compatible with the new server. Further, FINRA found that the firm did not monitor for irregularities in terms of the volume of emails ingested into the review platform.
After identifying the electronic correspondence failure in January 2019, the firm filed a Rule 4530 disclosure report.
FINRA found that the firm violated FINRA Rules 3110(b)(4) ("Supervision; Review of Correspondence and Internal Communications") and 2010 ("Standards of Commercial Honor and Principles of Trade").
To settle charges, the firm agreed to a (i) censure and (ii) $150,000 fine.
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