COMPLIANCE NEWSFLASHES
Fidelity Brokerage Pays $2 Million in Document Alteration and Destruction Penalties
The SEC and NYSE recently announced the initiation and settlement of enforcement actions against Fidelity Brokerage services as a result of the alteration or destruction of documents in numerous Fidelity Brokerage branch offices. In settlement of these actions, Fidelity brokerage will pay $1 million in SEC civil penalty charges along with a $1 million fine imposed by the NYSE.
"Destroying and 'cleaning up' files in advance of internal inspections or NYSE examinations corrupts the integrity of the regulatory process and will not be tolerated," said Susan Merrill, NYSE's chief of enforcement, in the release.
In addition to finding that Fidelity Brokerage violated the broker-dealer books and records provisions of SEC Rule 17a-4, the SEC also found that Fidelity Brokerage failed to supervise reasonably the employees who tampered with the records. The NYSE also took separate disciplinary actions against seven individuals.
An investigation found that at least 62 employees engaged in some form of this conduct in at least 21 branch offices, but Fidelity Brokerage neither admitted or denied any of the findings.
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