Published On: November 18, 2015

The Financial Industry Regulatory Authority (FINRA) fined Scottrade $2.6 million for failing to retain a large number of securities-related electronic records in the required format and for failing to retain certain categories of outgoing emails. FINRA also claimed that Scottrade did not have a reasonable supervisory system in place to achieve compliance with certain records rules. Scottrade had a data breach in early October of this year that targeted the names and street addresses of 4.6 million clients. FINRA and federal securities laws require that business-related electronic records be kept in non-rewritable, non-erasable format, referred to as “Write-Once, Read-Many” or “WORM” format to prevent alteration.

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