Santander fined for failure to capture 6M emails from employees
A coding error has turned out to be quite costly for Santander Investment Securities Inc, as the firm will have to pay a fine of $150,000 as a part of a settlement with the United States Financial Industry Regulatory Authority (FINRA).
From January 2014 through January 2019, Santander failed to capture approximately 6 million emails from 109 employee email accounts for supervisory review due to a coding error. The error was not identified and instead persisted because Santander did not reasonably monitor and test its system to ensure that emails were properly routed to the firm’s email review platform.
In January 2014, Santander changed its email server. Following the server switch, the existing process to ensure emails were journaled to the email review platform from the new server did not work as it had before. Santander had no process in place to ensure that emails from the new server were journaled to its email review platform as intended.
For example, the firm did not conduct an initial test to make sure that the process worked and that each new employee’s emails were in fact journaled to the review platform. Nor did the firm monitor the volume of email ingested into its review platform for irregularities or conduct any reconciliation of the email addresses to be monitored with the emails that were ingested. As a result, the firm did not discover the issue until January 2019.
After identifying the issue, Santander self-reported it pursuant to Rule 4530. The firm then investigated the underlying causes of the failure and implemented changes to its policies and procedures to prevent a similar issue going forward. The firm also conducted a lookback review of a sample of the emails not initially captured.
In 2018, this failure affected more than three quarters of the firm’s employees subject to supervisory review.
Santander was found to have violated NASD Rule 3010 (for conduct before December 1, 2014), FINRA Rule 3110 (for conduct between December 1, 2014 and January 24, 2019) and 2010.
On top of the fine, the firm has agreed to a censure.
