LPL to Pay $9 Million for Systemic Email Failures and for Making Misstatements to FINRA

FINRA announced that it fined LPL Financial LLC ("LPL") $7.5 million for 35 separate, significant email system failures, which prevented LPL from accessing hundreds of millions of emails and reviewing tens of millions of other emails.

The following failures were highlighted by FINRA:

• Over a four-year period, LPL failed to supervise 28 million "doing business as" ("DBA") emails sent and received by thousands of representatives who were operating as independent contractors.
• LPL failed to maintain access to hundreds of millions of emails during a transition to a less expensive email archive, and 80 million of those emails became corrupted.
• For seven years, LPL failed to keep and review 3.5 million Bloomberg messages.
• LPL failed to archive emails sent to customers through third-party email-based advertising platforms.

FINRA stated that LPL also made material misstatements to FINRA during its investigation of the firm's email failures. LPL was ordered to establish a $1.5 million fund to compensate brokerage customer claimants potentially affected by its failure to produce email.

See: Press Release.