South Florida Arbitration & Litigation Lawyer Blog
FINRA Arbitration Attorney, Russell L. Forkey, Esq.
June, 2011:
Geoffrey Richards Securities Corp. (CRD #120007, Hypoluxo, Florida) submitted a Letter of Acceptance, Waiver and Consent in which the firm was censured and fined $25,000. Without admitting or denying the findings, the firm consented to the described sanctions and to the entry of findings that it failed to preserve all of its business-related electronic communications. The findings stated that the firm attempted to preserve such communications by burning them to a non-rewriteable, non-erasable disc on a monthly basis, but the process was deficient because it did not result in all such communications being saved to the disc. The findings also stated that the firm did not identify this deficiency in its audit of its electronic communications preservation system. The findings also included that the firm, in contravention of its written supervisory procedures, permitted registered representatives to use outside or non-firm-sponsored email accounts to send and receive securities business-related emails. FINRA found that the firm’s preservation process did not capture these emails that were sent to or from those accounts; therefore, the firm did not retain and review them. FINRA also found that the firm relied exclusively on electronic storage media to preserve its business-related electronic communications but did not retain a third party who had the access or ability to download information from its electronic storage media. (FINRA Case #2009015971101).