Brokerage Firms Fail to Protect Consumer Records

The Financial Industry Regulation Authority (FINRA) announced fines against 12 securities firms for their failure to accurately protect consumer records. FINRA carried out fines, totaling $14.4 million, against 12 securities brokerage firms, including some of the largest-backed firms in the country. FINRA found that these firms storing broker-dealer and consumer records without precautions in place to prevent alteration.

Consumer Records Left Vulnerable

Customers are left vulnerable when securities brokerage firms leave no protection plan in place for securing consumer records and other broker-dealer data. Fraudsters and financial hackers can access these records and alter or erase them. They can also drain these databases of personal financial information. FINRA prescribes a certain format for regulating consumer records to prevent alteration. FINRA requires the “write once, read many”, or WORM, format for broker-dealer firms to use. According to FINRA’s fine report, the improperly stored records affected millions of consumers. Below is a list of securities brokerage firms included in FINRA’s fine:

• Wells Fargo Securities, LLC and Wells Fargo Prime Services, LLC – $4 million joint-fine
• RBC Capital Markets LLC and RBC Capital Markets Arbitrage S.A. – $3.5 million joint-fine
• RBS Securities, Inc. – $2 miilion fine
• Wells Fargo Advisors, LLC, Wells Fargo Advisors Financial Network, LLC and First Clearing, LLC – $1.5 million joint-fine
• SunTrust Robinson Humphrey, Inc. – $1.5 million
• LPL Financial LLC – $750,000
• Georgeson Securities Corporation – $650,000
• PNC Capital Markets, LLC – $500,000

Many of the securities brokerage firms listed are some of the largest in the country, providing millions of consumers with brokerage and other financial services. By improperly collecting and storing information, these firms leave consumers stuck with the biggest risk; financial liability. Broker-dealer/consumer records contain many vital bits of personal information and other sensitive financial data. If this information is left open to something like alteration, it could mean big trouble for the customer.

Know Your Resources

At Savage Villoch Law, PLLC, it is our mission to protect financial consumers and brokerage service customers. Contact us today if you feel your information was mishandled or for another complaint against your broker-dealer. Visit FINRA’s BrokerCheck to find out everything you need to know about a potential broker-dealer or brokerage firm.