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Failure to comply with FINRA leads to hefty fines, so it’s imperative that organizations verify backups and archives are unaltered, secured, and retained to avoid millions in penalties.

JP Morgan Pays $200 Million in Penalties.

For large financial institutions, failure to comply with FINRA regulations is costly. In previous years, the worst fines totaling $14.4 million, were given to 12 firms that failed to secure financial records from being altered without a proper audit trail. In addition, any changes to records must be logged in case of a data breach and further investigation into the root cause. Unfortunately, the 12 firms failed to properly log and protect data, which caused damage to customers' data integrity.

JP Morgan was recently fined $200 million for failing to preserve email archives containing staff communications on workstations and mobile devices. After a third-party subpoena could not be fulfilled, an audit revealed JP Morgan's oversight of data retention policies, costing them millions of dollars in fines.

What Financial Institutions and Brokers Should Know?

Any institution regulated by the US Securities and Exchange Commission (SEC) must review requirements and ensure they are met. The organization needs a strategy to back up and retain data to protect financial data. Of course, having a retention plan for electronic data is only one component of FINRA regulations, so every organization should thoroughly review FINRA compliance. Usually, full FINRA compliance requires a third party knowledgeable in all things FINRA, but organizations can take steps to secure their data and move forward with FINRA compliance.

Electronic data includes communication and stored customer information. Any sensitive information should be protected using cryptographically secure methods such as encrypting data at rest and in-transit. Backups and archives should also be secured, but they still must be available when necessary.

Archives differ from backups, and ArcTitan ensures that all archives follow FINRA rules while staying available to the people who need to work with them. For example, email archives are necessary for investigations and legal concerns. For example, the start of JP Morgan's audit was the failure to answer a subpoena correctly. Still, ArcTitan archives allow your legal team and corporate staff to search for important data to respond to subpoenas or investigate cybersecurity incidents.

Sound archives also provide a search feature and index content for fast results. ArcTitan offers an archiving platform that helps everyone involved in an audit quickly find data and export it for future use. Stakeholders get reports to identify any activity on the platform. ArcTitan secures all data in the cloud so that administrators do not have the overhead of applying specific security measures.

TitanHQs security platform has several other benefits to help with security training, compliance, data protection, phishing simulations, reports, and real-time intervention during simulated attacks. Find out how ArcTitan can help with your FINRA compliance and data archives with a free demo.

Did You Know?


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Jennifer Marsh

Jennifer Marsh


Talk to our Team today

Talk to our Team today