The Financial Industry Regulatory Authority (FINRA) recently fined five units of ING Groep NV a total of $1.2 million for failing to retain or review millions of emails.
The Financial Industry Regulatory Authority (FINRA) recently fined five units of ING Groep NV a total of $1.2 million for failing to retain or review millions of emails. The penalties highlight the importance of email retention policies and procedures, particularly for regulated companies.
According to FINRA, the firms failed to properly configure hundreds of employee email accounts to ensure that messages were retained and reviewed. In addition, four of the subsidiaries did not have systems in place to retain certain types of emails, including emails sent to distribution lists, emails received as blind carbon copies, and “cloud” email (emails sent through third-party systems). Because the emails were not retained, they were not subject to supervisory review
In addition to retention violations, FINRA also found that four of the firms failed to review millions of emails that the firms’ email review software had flagged for supervisory review. Overall, supervisory principals did not evaluate nearly six million emails flagged for review because the email review software was not properly configured.
As this case makes clear, New York and New Jersey firms regulated by FINRA must follow strict guidelines for email archiving. In fact, in announcing the fines, Brad Bennett, executive vice president and chief of enforcement, made it clear that “email retention and review continues to be an important regulatory responsibility and an issue of concern for FINRA.”
Under FINRA’s Books & Records Rule (3110),member firms are required to make and preserve accounts, records, memoranda, books and correspondence in conformity with all applicable regulations, statements, and rules under SEC 17a-3 under the Securities Exchange Act of 1934. In addition, record retention procedures must comply with SEC Rule 17a-4. Overall, keeping detailed records allows firms to clearly demonstrate that they have fulfilled both their investor and regulatory obligations.
If you have any questions about the case or would like to discuss your business’s email retention policies, please contact me, Dan Brecher, or the Scarinci Hollenbeck attorney with whom you work.
The most common franchise disputes involve breach of contract, franchise termination and non-renewal, intellectual property rights, territorial encroachment, royalty and fee payments, franchisor support obligations, and violations of state franchise laws such as the New Jersey Franchise Practices Act. Franchisors and franchisees can often resolve these conflicts by providing written notice detailing the dispute and […]
Reputational Risk and Legal Exposure: Why New Jersey Businesses Must Manage Them Together
New Jersey businesses must manage legal and reputational risk together because modern disputes play out on two fronts at once: the legal proceeding itself and the court of public opinion, where customers, employees, investors, and business partners often reach conclusions long before a judge or jury has had the opportunity to evaluate the facts. Success […]
Eviction Is Not Always the End: Understanding Post-Possession Rent Claims in New Jersey and New York
No. An eviction does not automatically end a tenant’s obligation to pay rent. Post-eviction rent claims are common because recovering possession resolves who has the right to occupy the premises, but it does not extinguish the tenant’s contractual obligations under the lease. Whether unpaid or future rent remains owed depends on three factors: the lease’s […]
Company Dissolved? Legal and Financial Consequences to Expect
A company is dissolved; legally, it ceases to exist. Accordingly, dissolution results in significant legal and financial consequences. It is a process that must be properly managed to avoid continuing liability. The Corporate Dissolution Process Corporate dissolution is the legal process of formally closing a corporation, paying its debts and distributing the remaining assets. Most […]
The Legal Implications of Signing a Triple Net Lease
A triple net lease is a commercial lease in which the tenant pays the property’s real estate taxes, insurance, and maintenance costs, known as the three nets, in addition to base rent. They are most often used in freestanding retail and office buildings and in large single-tenant industrial properties, with terms that typically run 10 […]
Running a business in New Jersey and New York means operating within one of the most legally complex environments in the country. From the moment you form your company to the day you sell it, and every contract, hire, dispute, and transaction in between, business law is present in decisions that look, on the surface, […]
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
Let`s get in touch!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!
