The Financial Industry Regulatory Authority has fined Raymond James Financial Services $2 million for failing to maintain reasonably designed supervisory systems and procedures for reviewing e-mail communications. In addition, Raymond James has agreed to conduct a risk-based retrospective review to detect potential violations evidenced in past e-mails.
According to FINRA, during a nine-year review period, Raymond James’ e-mail review system was flawed in significant respects, allowing millions of e-mails to evade meaningful review. This created the unreasonable risk that certain misconduct by firm personnel could go undetected by the firm, FINRA stated. The combinations of words and phrases—otherwise known as the “lexicon”—used to flag e-mails for review were not reasonably designed to detect certain potential misconduct that Raymond James, in light of its size, structure, business model, and experience from prior disciplinary actions, knew or should have anticipated would recur from time to time.
