$100,000 LPL Fine Underlines Importance Of Archiving Emails

Monday, March 21, 2011 23:53
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$100,000 LPL Fine Underlines Importance Of Archiving Emails

Tags: client communications | compliance | FINRA | LPL

FINRA fined LPL $100,000 after "a technology problem" kept roughly 3 million outbound email messages from going through compliance before going out.

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On a per-message basis, that fine comes out to about 3 cents per offending message, but FINRA's real issue here is not the sheer amount of emails that allegedly circumvented the system but the fact that the system could be circumvented at all.

 

LPL's review tool apparently simply failed to receive email from advisors in one of the firm's affiliate banks and so couldn't monitor it for compliance problems.

 

Moreover, LPL then seems to have marked all the messages "transmitted and received" even though no manager ever saw or signed off on them.

 

It's serious business. In a world of hundred-million- and even billion-dollar fines, $100,000 may not look like much, but it's enough to make a bit of a dent in LPL's bottom line . . . and a big one if this happened to a smaller company.

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