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BD Smacked with $1.5 Million Fine for Failing to Properly Maintain Electronic Trading Records

 

FINRA fined a large broker-dealer $1.5 Million for failing to properly maintain electronic brokerage records.  According to FINRA, the respondent’s ATS business failed to maintain over 100 million trading records in “write once, read only” (WORM) format over a 6-year period.  FINRA also faults the BD for failing to maintain duplicate copies of over 300 million orders placed over the same period.  The failures also resulted in charges that the firm did not have adequate audit or compliance procedures.  FINRA said the required records and formats are necessary for regulatory examinations and internal audits.

OUR TAKE: The IT folks must connect with the compi-pros to understand the specific regulatory requirements for electronic data retention.  Then, the compli-pros must determine how to implement effective audit and compliance surveillance.  The most dangerous phrase in financial services: “That’s not my job.”

http://disciplinaryactions.finra.org/Search/ViewDocument/69291

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