FINRA fined a well known Brokerage Firm in December for failing to properly disclose their record keeping policies and promptly alert FINRA of their failures. Multiple investigations over almost 4 years were affected by the Firm’s failure to follow its own procedures.
What Was Discovered by FINRA?
- Telephone records from May 2017 to May 2021 were requested by FINRA in ten investigations, but they were not provided in a timely manner.
- The Firm had policies to remove telephone records after eighteen months, but they were moving their records to a secondary location.
- In multiple investigations, records were reported as unavailable or unretained when they were in this secondary location.
- FINRA is requiring a Senior Officer from the Firm to certify within 90 days that policies, procedures, processes, and internal controls have been designed to properly remediate the failures.
Vigilant’s Final Conclusion
This recent FINRA action shows that compliance not only relies on the proper policies and procedures, but on their proper implementation. Compliance is an ongoing project that relies on a strong “culture of compliance”.
Implementation failures can be financially costly and overly stressful situations could potentially occur when regulators are performing investigations.
Vigilant provides On-Going Compliance Solutions for Advisers and Broker Dealers to fit your Firm’s needs.
As you continue to prepare for the year ahead, be sure to check out Vigilant’s 2023 Regulatory Filings Calendar, which includes Filing Deadlines for each Quarter in 2023.
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