The Securities and Exchange Commission, the New York Stock Exchange and NASD jointly fined five broker/dealers Tuesday for violations of record-keeping requirements concerning e-mail communications.
The firms were fined a total of $8.25 million and are required to review their procedures to ensure future compliance with record-keeping statutes and rules.
The fines were handed down against Deutsche Bank Securities Inc., Goldman Sachs & Co., Morgan Stanley & Co. Inc., Salomon Smith Barney Inc. and U.S. Bancorp Piper Jaffray. All consented to the fines without admitting or denying the allegations.
Each firm will pay a fine of $1.65 million and must establish new procedures within 90 days that will preserve e-mails for three years and/or preserve them in an accessible place for two years.
The SEC says the e-mail preservation problems were uncovered during joint and separate investigations by the SEC itself along with the NYSE and NASD.
Regulators say the brokerages had no uniform methods of maintaining or organizing their e-mail archives. Employee hard drives often were erased when individuals left a firm while back-up storage tapes were discarded or erased. The SEC says even when the firms did retain their e-mails, they were stored in such a disorganized manner as to make those e-mails very difficult to track down.
A spokeswoman for Salomon Smith Barney told CNNfn, “This settlement resolves a complex regulatory issue that has been the subject of much discussion over recent years. We are pleased to have the matter resolved.”
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