Finra hits State Street with $1.5 million fine for electronic record-keeping violations

Regulator censured the firm for failing to maintain copies of messages

Jul 12, 2017 @ 2:39 pm

By InvestmentNews

The Financial Industry Regulatory Authority Inc. has censured State Street Global Markets and fined it $1.5 million for failing to maintain electronic brokerage records in a non-erasable and non-rewritable format, known as WORM, as required by regulation.

(More: Cybersecurity looms as adviser business threat)

In a letter of acceptance, waiver and consent, Finra said that from Nov. 4, 2011 to April 21, 2017, SSGM failed to maintain in WORM format approximately 131.5 million records of orders placed by institutional clients. WORM, which stands for "write once, read many," is intended to prevent the alteration or destruction of records stored electronically, Finra said.

It also said that SSGM failed to keep a duplicate copy of the electronic record, as required by regulation.

(More: Finra makes up for 2016 operating revenue hit with big increase in fine income)

From March 2005 to April 2007, SSGM failed to capture, maintain and preserve all business-related instant messages sent and received and by its registered representatives. For its actions, the firm consented to a censure and a fine of $100,000 in April 2007.


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