FINRA Fines Five ING Firms $1.2 Million for Email Retention and Review
WASHINGTON -- February 19, 2013
The Financial Industry Regulatory Authority (FINRA) announced today that it
has fined five affiliates of ING $1.2 million for failing to retain or review
millions of emails for periods ranging from two months to more than six years.
The five firms, indirect subsidiaries of ING Groep N.V., are Directed
Services, LLC; ING America Equities, Inc.; ING Financial Advisers, LLC; ING
Financial Partners, Inc.; and ING Investment Advisors, LLC.
Brad Bennett, Executive Vice President and Chief of Enforcement, said, "As a
result of broad systemic failures, these firms failed to capture and retain
emails from hundreds of representatives and other associated persons, and
failed to take adequate steps to ensure that their principals were fulfilling
their responsibilities to review emails. Email retention and review continues
to be an important regulatory responsibility and an issue of concern for
FINRA found that the firms failed to properly configure hundreds of employee
email accounts to ensure that the emails sent to and from those accounts were
retained and reviewed at various times between 2004 and 2012. In addition,
four of the firms failed to set up systems to retain certain types of emails,
such as emails using alternative email addresses, emails sent to distribution
lists, emails received as blind carbon copies, encrypted emails and “cloud”
email (emails sent through third-party systems). As a result of these
failures, emails sent to and from hundreds of employees and associated persons
were not retained; and because the emails were not retained, they were not
subject to supervisory review.
In addition, four of the firms failed to review millions of emails that the
firms’ email review software had flagged for supervisory review. At various
times between January 2005 and May 2011, nearly six million emails flagged for
review went unreviewed by supervisory principals because the email review
software was not properly configured.
In concluding the settlement, the firms neither admitted nor denied the
charges, but consented to the entry of FINRA's findings. FINRA found that the
firms violated the recordkeeping provisions of the federal securities laws and
FINRA rules, and supervisory requirements under FINRA rules.
FINRA also ordered the firms to conduct a comprehensive review of their
systems for the capture, retention and review of email, and to subsequently
certify that they have established procedures reasonably designed to address
and correct the violations.
FINRA's investigation was conducted by the Departments of Enforcement and
Investors can obtain more information about, and the disciplinary record of,
any FINRA-registered broker or brokerage firm by using FINRA's BrokerCheck.
FINRA makes BrokerCheck available at no charge. In 2012, members of the public
used this service to conduct 14.6 million reviews of broker or firm records.
Investors can access BrokerCheck at www.finra.org/brokercheck or by calling
(800) 289-9999. Investors may find copies of this disciplinary action as well
as other disciplinary documents in FINRA's Disciplinary Actions Online
FINRA, the Financial Industry Regulatory Authority, is the largest independent
regulator for all securities firms doing business in the United States. FINRA
is dedicated to investor protection and market integrity through effective and
efficient regulation and complementary compliance and technology-based
services. FINRA touches virtually every aspect of the securities business –
from registering and educating all industry participants to examining
securities firms, writing rules, enforcing those rules and the federal
securities laws, informing and educating the investing public, providing trade
reporting and other industry utilities, and administering the largest dispute
resolution forum for investors and firms. For more information, please visit
Financial Industry Regulatory Authority (FINRA)
Michelle Ong, 202-728-8464
Nancy Condon, 202-728-8379
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