Birmingham, Alabama-based Stern, Agee, & Leech, Inc. (“Stern Agee”) submitted a Letter of Acceptance, Waiver and Consent (“AWC”) to pursue a settlement regarding alleged rule violations. According to FINRA’s Monthly Disciplinary and Other FINRA Actions Publication a Stern Agee employee placed customers’ personal and confidential information at risk when an unencrypted laptop was lost by an Information Technology (“IT”) employee.
On May 29, 2014, an IT employee lost a laptop by inadvertently leaving it in a restroom. The computer contained files which included customer information; customer account numbers, addresses and correspondence. At the time of the incident Stern Agee’s Written Supervisory Procedures (“WSP’s”) did not include policies requiring encryption.
According to the AWC, “the Firm’s WSPs did not adequately address the technology in use, specifically, laptops, and the Firm failed to take appropriate technological precautions to protect customer and highly sensitive information.” FINRA found that Stern Agee’s supervisory systems were not reasonably designed to safeguard sensitive customer information. Furthermore, Stern Agee had insufficient supervisory procedures in place to protect customer information stored on laptops. Stern Agee has been charged with violating Regulation S-P of the Securities Exchange Act of 1934 (Regulation S-P, 17 C.F.R. §248.30), NASD Conduct Rule 3010 and FINRA Rule 2010.
Jacko Law Group, PC (“JLG”) assists securities and financial services industry clients develop effective written policies, procedures and internal controls that help prevent abuses, detect and mitigate conflicts of interest, reduce firm risk and maintain compliance with firm protocols and regulatory requirements.
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