On Monday, May 24, 2010, the Financial Industry Regulatory Authority, Inc.
(FINRA) fined Piper Jaffray and Co. $700,000 for failing to retain approximately
4.3 million e-mails over a period of six years, according to the
FINRA news release.
In 2002, after a joint sanction by the New York Stock Exchange Regulation
and NASD, the firm was required to certify that it had policies and procedures
in place to ensure the preservation of electronic mail communications.
In March 2003, the firm certified that such systems were in place. According
to FINRA, the firm then failed to retain millions of e-mails between 2002
and 2008 without once informing regulators that it was having email retention
and retrieval issues.
The issues were discovered during the course of a FINRA investigation into
a claim of misconduct against a former Piper Jaffray and Co. employee.
FINRA had requested the former employee's e-mail records and, upon
receiving an electronic version, realized that the electronic records
were incomplete. Once the discrepancies were brought to light, the firm
informed FINRA of the problem.
Piper Jaffary and Co. settled with FINRA without admitting or denying the charges.