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.
Corporate Consolidation and Antitrust Issues in Mergers
Corporate consolidation involves two or more businesses merging to become a single larger entity. The result is often a stronger and more competitive company that can better navigate today’s competitive marketplace. What Is Corporate Consolidation? Corporate consolidation closely resembles a basic merger transaction. The primary difference is that a consolidation creates an entirely new business […]
Business law plays a critical role in nearly every aspect of running a successful enterprise, from negotiating a commercial lease to drafting employee policies to fulfilling corporate disclosure obligations. Understanding what is business law and your legal obligations can help your business run smoothly and build productive relationships with clients, business partners, regulators, and others. […]
Corporate Transactions: Best Practices for Successful Deals
Corporate transactions can have significant implications for a corporation and its stakeholders. For deals to be successful, companies must act strategically to maximize value and minimize risk. It is also important to fully understand the legal and financial ramifications of corporate transactions, both in the near and long term. Understanding Corporate Transactions The term “corporate […]
How to Conduct a Fair and Legal Employee Termination in 2025
Ongoing economic uncertainty is forcing many companies to make tough decisions, which includes lowering staff levels. The legal landscape on both the state and federal level also continues to evolve, especially with significant changes to the priorities of the Equal Employment Opportunity Commission (“EEOC”) under the Trump Administration. Terminating an employee is one of the […]
Admin Dissolution for Annual Report: What You Need to Know
While filing annual reports may seem like a nuisance, failing to do so can have significant ramifications. These include fines, reputational harm, and interruption of your business operations. In basic terms, “admin dissolution for annual report” means that a company is dissolved by the government. This happens because it failed to submit its annual report […]
Antitrust laws are designed to ensure that businesses compete fairly. There are three federal antitrust laws that businesses must navigate. These include the Sherman Act, the Federal Trade Commission Act, and the Clayton Act. States also have their own antitrust regimes. These may vary from federal regulations. Understanding antitrust litigation helps businesses navigate these complex […]
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!
