MFDF - Mutual Fund Directors Forum - FINRA Sanctions 12 Firms for Failing to Protect Records from Alteration test

Member Login

Request an account

Sample Banner 2

FINRA Sanctions 12 Firms for Failing to Protect Records from Alteration

FINRA announced on December 21, 2016 that it had fined 12 firms a total of $14.4 million for significant deficiencies relating to the preservation of broker-dealer and customer records in a format that prevents alteration. The firms sanctioned included Wells Fargo Advisors, LPL Financial and PNC Capital Markets.  FINRA noted increasing cybersecurity threats and stated that its rules as well as the federal securities laws require that business-related electronic records be kept in a specific format to prevent alteration.  FINRA also cited SEC remarks that these requirements are an essential part of the investor protection function because a firm’s books and records are the “primary means of monitoring compliance with applicable securities laws, including antifraud provisions and financial responsibility standards.” FINRA found that the 12 firms had deficiencies that affected millions, and in some cases, hundreds of millions, of records pivotal to their brokerage businesses, spanning multiple systems and categories of records. As part of the settlement, the firms neither admitted nor denied the charges.

  • All
  • Accounting and Audit
  • Advisory Contracts
  • Board Governance
  • Board Governance: Board Leadership
  • Board Governance: Compensation
  • Board Governance: Oversight of CCO
  • Board Governance: D&O Insurance
  • Board Governance: Self-Evaluation
  • Closed-end Funds
  • ETFs
  • Other Oversight
  • Other Oversight: Alternative Investments and Derivatives
  • Other Oversight: Custody
  • Other Oversight: Fixed Income funds
  • Other Oversight: Distribution
  • Other Oversight: Portfolio Trading
  • Other Oversight: Proxy Voting
  • Other Oversight: Securities Lending
  • Legislative News
  • Money Market Funds
  • Reference
  • Regulatory News
  • Risk
  • Shareholder Disclosure
  • Valuation
  • Webinars
  • Aaron New Tag