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FINRA Fines Piper Jaffray $700,000 for Lack of Email Archiving

May 24, 2010

PiperJaffrayFINRA announced today that it is fining Piper Jaffray $700,000 for its failure to retain roughly 4.3 million emails from November 2002 to December 2008. Piper Jaffray also failed to inform FINRA of their email retrieval issues, inhibiting the firm complying with extraction requests in a timely manner.

This is not the first time Piper Jaffray was embroiled in email controversy. In november of 2002 they had been sanctioned for email retention failures by the Securities and Exchange Commission, New York Stock Exchange Regulation and NASD. Following the settlement, Piper Jaffray was required to certify that the system had been reviewed and was able to meet email retention regulations. This certification was made in March of 2003, and no technical issues or system failures were reported since then.

Email retention policiesThe failings of Piper Jaffray was brought to light after investigators requested the emails of a former employee suspected of misconduct. They produced a CD ROM with supposedly all the employee’s emails. However, while reviewing the CD, FINRA discovered that there was an email absent on the CD that investigators had in hard copy form. This particular email contained content that caused the internal investigation, and resulted in the termination of the employee in question. When questioned further about the missing email, Piper Jaffray conceded and admitted that they experienced email retrieval and retention problems across the firm since 2002.

What did we learn from this? In the case of Piper Jaffray’s: just ONE lost email can lead to catastrophic ramifications. So… ARCHIVE EVERYTHING.

Securities Law Alert:FINRA fines Firm $1.2 Million

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