Broker-Dealer Settles Charges for Failures in Responding to FINRA Document Requests

A broker-dealer settled FINRA charges for failing to "timely or completely produce certain phone records responsive to FINRA document requests in ten separate FINRA investigations."

In a Letter of Acceptance, Waiver and Consent, FINRA also said that the broker-dealer inaccurately represented to FINRA that records older than 18 months were unavailable after FINRA requested them. FINRA found that the firm stored phone call records in two separate places, one of which contained records that were older than 18 months. FINRA found that the broker-dealer failed to search the location that held the older records, even though the broker-dealer's staff became aware that older records were available. FINRA also said that the firm failed "to promptly alert FINRA once it learned of its production failures."

As a result, FINRA determined that the broker-dealer violated FINRA Rule 2010 ("Standards of Commercial Honor and Principles of Trade") and Rule 8210 ("Provision of Information and Testimony and Inspection and Copying of Books"). To settle the charges, the broker-dealer agreed to (i) a censure, (ii) a civil monetary penalty of $1.1 million and (iii) undertakings to establish supervisory controls regarding record retention.