FINRA Fines Barclays for Improper Recordkeeping

The Financial Industry Regulatory Authority (FINRA) has fined Barclays $3.75 million for not preserving certain electronic records, emails and instant messages in the proper manner from at least 2002 to 2012.
By Jake Safane(2147484770)
The Financial Industry Regulatory Authority (FINRA) has fined Barclays $3.75 million for not preserving certain electronic records, emails and instant messages in the proper manner from at least 2002 to 2012.

FINRA says that during these 10 years, Barclays did not preserve its required electronic book and records including order and trade ticket data, trade confirmations, blotters, account records and other similar records in Write-Once, Read-Many (WORM) format. This format, required by U.S. securities laws and FINRA rules, is non-rewritable and non-erasable so that records cannot be altered.

Because Barclays did not preserve these records in WORM format, says Barclays, the bank was unable to determine if its records were unaltered, and this was an issue that spread across all of the firm’s business areas.

“Ensuring the integrity, accuracy and accessibility of electronic books and records is essential to a firm’s ability to meet its compliance obligations. The format errors in this case made it nearly impossible for Barclays to verify that these key materials remained in an unaltered condition,” says Brad Bennett, executive vice president and chief of enforcement, FINRA.

Besides not keeping records in WORM format, FINRA also found that from May 2007 to May 2010, Barclays did not properly retain certain attachments to Bloomberg emails, and did not properly retain approximately 3.3 million Bloomberg instant messages from October 2008 to May 2010. In addition to violating FINRA, Securities and Exchange Commission (SEC) and National Association of Securities Dealers (NASD) rules, this affected Barclay’s ability to respond to requests for electronic communications in regulatory and civil matters, FINRA says.

“Finally, Barclays failed to establish and maintain an adequate system and written procedures reasonably designed to achieve compliance with SEC, NASD, and FINRA rules and regulations, as well as to timely detect and remedy deficiencies related to those requirements,” FINRA says. In settling the matter, Barclays neither admitted nor denied the charges, but consented to the entry of FINRA’s findings.

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