Firms hit with $14.4 Million in FINRA Fines

FINRA fined a dozen financial firms $14.4 million for “significant deficiencies” in protecting broker-dealer and client data — affecting hundreds of millions of records, the regulator said.

Wells Fargo took the biggest hit, as FINRA fined the bank’s securities and brokerage units a combined $5.5 million. In addition, RBC was fined $3.5 million, SunTrust $1.5 million and LPL Financial $750,000, according to the documents.

FINRA said its rules and federal securities laws now require a WORM format to maintain electronic records or “write once, read many”. This prevents the alteration or destruction of the data, according to the regulator.

Regulators say this requirement is necessary in order to protect investors from harm as the records facilitate compliance and regulatory monitoring. And such record keeping has only grown in importance over the past decade, as more and more documents are kept in electronic formats.
FINRA said that some of the firms’ supervisory systems contained deficiencies, which compromised firms’ ability to detect record-keeping problems.

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