FINRA fines firm $1.2m for not archiving emails properly
Forensic Update had an interesting post today on the difference between policy and reality- and the cost thereof when you get caught:
In November of 2009, the Financial Industry Regulatory Authority (“FINRA”, Ed.- the UK equivalent of the Financial Services Authority) reached a settlement with Metlife Securities Inc. and three related broker-dealers (referred to collectively as “MetLife” herein) for the failure to implement supervisory systems required to meet compliance obligations. The “settlement,” known as a Letter of Acceptance, Waiver and Consent (“AWC”) is a mechanism provided under the FINRA Rule 9216 to permit the resolution of a controversy involving a member or associated person over a violation of of any rule, regulation, or statutory provision that FINRA has the jurisdiction to enforce. What is remarkable about this AWC is that it imposed a fine of $1.2 million substantially because MetLife failed to meet their compliance obligations related to the review of electronic mail (“email”) correspondence. Put differently, FINRA levied this fine because MetLife did not follow its own written policy on matters related to email archiving and the review of archived email.Having the policies in place is not the same as enforcing or applying them. Without central control designed to comply with regulation- policies are about as useful as a chocolate fireguard.