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.
Are Stay Interviews the Key to Retaining Top Talent?
Retaining top talent continues to be one of the greatest challenges facing employers today. Even in an employer’s market, the loss of a key employee can disrupt operations and result in significant costs. While compensation plays a role, long-term retention often depends on workplace culture, communication, and employee engagement. One increasingly popular strategy for improving […]
Secured transactions form the backbone of a wide range of business dealings, including business loans, mortgages, and inventory financing. Because the stakes are often high and relatively minor oversights can have drastic consequences, lenders and borrowers should thoroughly understand how to form an enforceable security agreement that protects their legal rights. What Is a Secured […]
Don’t Cash a “Paid in Full” Check Without Understanding the Legal Implications
Cashing a check marked “paid in full” can be a risky endeavor, particularly if you don’t fully understanding the legal implications. If you are owed more than the amount of the check you accept and deposit, you may waive your right to collect the full disputed amount. That is why you should consider either rejecting […]
Changes to Qualified Small Business Stock Will Benefit Startup Founders and Investors
The One Big Beautiful Bill Act of 2025 (OBBBA) significantly impacts federal taxes, credits, and deductions. A key change relating to Qualified Small Business Stock (QSBS) allows greater tax-free gains for investments in startups and other qualifying small businesses. Company founders and other investors should understand how the enhanced tax strategy works or risk missing […]
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. […]
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!
