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.