FINRA Imposes $150,000 Fine on Santander Investment Securities

The Financial Industry Regulatory Authority (FINRA) announced that it has ordered Santander Investment Securities to pay a fine of $150,000 due to the firm’s failure to capture around 6 million emails from 109 employee email accounts for supervisory review.
According to the press release, between January 2014 and January 2019, Santander did not monitor its email review platform properly and failed to capture more than 6 million emails due to a coding error. The firm failed to identify the issue and persisted with the problem for more than 5 years.
As a result, the violated NASD rule 3010 and FINRA rules 3110 and 2010. The official document cites that an email server change by in January 2014 caused the issue because, after that, employee’s emails from the local server did not reach its email review platform. The firm failed to conduct a test to check the delivery of emails and did not discover the problem until 2019.
Issue Identification
FINRA mentioned that despite the failure to identify the underlying problem in its email review system caused by a coding issue, the firm self-reported the problem in 2019. “The firm identified this issue in January 2019, when searching for a specific email within its review platform system. After identifying the issue, Santander self-reported it pursuant to Rule 4530. The firm then investigated the underlying causes of the failure and implemented changes to its policies and procedures to prevent a similar issue going forward. Additionally, the firm conducted a lookback review of a sample of the emails not initially captured,” the official press release states.
“During the relevant period, the firm failed to journal approximately 6 million emails from 109 employee email accounts to its email review platform for supervisory review. In 2018, this failure affected more than three-quarters of the firm’s employees subject to supervisory review.”
FINRA recently imposed a fine of around $475,000 on Global Markets for failing to disclose the potential conflict of interest related to equity research reports.

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