Finra fines Raymond James $2 million over emails

Regulator said firm's review system was 'flawed in significant respects.'

The Financial Industry Regulatory Authority Inc. has fined Raymond James Financial Services $2 million for failing to have in place adequate email supervisory systems as well as procedures for reviewing emails.

Finra found that during a nine-year review period, Raymond James’ email review system was “flawed in significant respects.” It said that millions of emails evaded meaningful review, creating “unreasonable risk that certain misconduct by firm personnel could go undetected by the firm.”

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The regulator said the firm’s combinations of words and phrases — or “lexicon” — used to flag emails for review were not reasonably designed to detect certain potential misconduct.

Finra said that in light of its size, structure, business model and experience from prior disciplinary actions, Raymond James should have known or anticipated that such misconduct would recur from time to time.

The firm also failed to devote adequate personnel and resources to the team that reviewed emails flagged by the system, even as the number of emails increased over time, Finra said.

Raymond James, which neither admitted nor denied the charges, has agreed to conduct a risk-based retrospective review to detect potential violations in past emails.