- SOLUTIONS & SERVICES
The Financial Industry Regulatory Authority (FINRA) fined Wells Fargo, RBC Capital Markets, LPL Financial and others a total of $14.4 million for a records management problem. This risk and compliance issue may have allowed company and customer records to be altered.
FINRA found that the firms failed to keep hundreds of millions of records in a "write once, read many" (WORM) format. The WORM format makes it impossible to alter or destroy records after they are written. Because they were not kept in this format, it is possible these records could have been edited by the firm after the initial creation of the record.
The firms accepted the fines but neither admitted nor denied the charges. According to FINRA, these particular records were "pivotal to the firms' brokerage business" and that it relies on these records to ensure firms are following securities laws. Additionally, they cited data breaches as a potential concern for these types of records.
From a risk and compliance standpoint, these revelations are an enormous concern. Not only are these firms not complying with the proper regulations, they are putting their data at risk of a leak or breach.
When it comes to your risk and compliance plan, here are a few questions you must ask: