The Financial Industry Regulatory Authority has imposed a $1.2 million fine on an insurer-affiliated securities firm over allegations that the firm had a weak e-mail supervision program.

FINRA, Washington, has negotiated the settlement with MetLife Securities Inc., New York, and three affiliates — New England Securities Corp., Walnut Street Securities Inc. and Tower Square Securities Inc.

“In concluding this settlement, the firms neither admitted nor denied the charges, but consented to the entry of FINRA’s findings,” FINRA says.

The companies, units of MetLife Inc., New York, (NYSE:MET) failed to establish an adequate supervisory system for the review of brokers’ e-mail correspondence with the public, FINRA says.

From March 1999 to December 2006, MetLife Securities and broker-dealer affiliates required that a supervisor review all of the brokers’ securities-related e-mails.

But “the firms did not have a system in place that enabled supervisors to directly monitor the e-mail communications of brokers,” FINRA says. “Instead, the firms relied on the brokers themselves to forward their e-mails to supervisors for review.”

Brokers could inspect brokers’ computers for e-mails that had not been forwarded, but brokers could avoid scrutiny by deleting e-mails from their computers, FINRA says.

MetLife Securities and the affiliates also used ineffective branch audit methods for detecting forwarding failures, FINRA says.

During the period in condition, two MetLife Securities brokers were able to use their MetLife e-mail accounts to send more than 100 e-mails to engage in undisclosed outside business activities and private securities transactions, FINRA says.

One of the brokers stole $6 million from customers while engaging in the outside securities transactions, FINRA says.

FINRA sanctioned MetLife Securities and its affiliates because of the weaknesses in the e-mail review system, and also because it believes the companies failed to set up adequate supervisory procedures relating to broker participation in outside business activities and private securities transactions, FINRA officials say.

“Although FINRA’s rules afford firms the flexibility to tailor procedures that are appropriate for their particular business models, all firms must have the ability to flag e-mails that may evidence misconduct,” Susan Merrill, FINRA’s enforcement chief, says in a statement. “Relying on brokers to provide copies of their own emails to supervisors for review is hardly an effective means to detect such misconduct.”

MetLife has put out a statement welcoming resolution of the FINRA investigation.

“MetLife fully cooperated with FINRA and has enhanced its e-mail screenings for all four broker-dealers,” a MetLife spokesman says in a statement. “We are pleased to have resolved this issue and put the matter behind us.”