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The Financial Industry Regulatory Authority (FINRA) has fined San Diego's LPL Financial $7.5 million and ordered it to deposit $1.5 million into an escrow account to establish a fund to make payments to customers in arbitrations or litigations against the firm. Between 2007 and 2012, brokerage LPL expanded rapidly and now has 13,300 independent brokers and 4.3 million customer accounts. During the expansion period, says FINRA, the firm's email systems failed repeatedly, preventing access to hundreds of millions of emails. LPL failed to produce requested materials to regulators, and likely failed to produce emails to litigants and customers in arbitration proceedings, says FINRA.

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Comments

Fred Williams May 22, 2013 @ 1:08 a.m.

How convenient to blame it on the email system.

From a technical point of view, it's utter b.s. Emails don't get "lost" or "erased" by accident. It takes significant effort to make emails disappear.

I have to wonder if anyone at FINRA even bothered to learn something about how email works before accepting this lame excuse...or if the fine is a response to this outrageous lie told by the LPL executives. (Did FINRA interview the person who was running their mail servers?)

As technology becomes ever more important in legal, social, and political questions, it's disheartening that the persons making the decisions are so woefully ignorant of how this stuff works...

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Don Bauder May 22, 2013 @ 6:26 a.m.

Fred Williams: You may be right. This could be lame regulation. It is certainly lame administration for a brokerage operation. FINRA is a non-governmental regulator. Best, Don Bauder

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Don Bauder May 22, 2013 @ 3:46 p.m.

ImJustABill: And the dog died of malnutrition. Best, Don Bauder

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