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FINRA Disciplinary Proceeding Against Caprock Securities, Inc.

On April 19, 2013, FINRA announced that it had censured and fined Caprock Securities, Inc. $15,000.00.  The Firm consented to the entry of findings that it failed to establish, maintain, and enforce a supervisory system reasonably designed to review and retain its associated persons’ email communications with the public.

Between March 5, 2007 and December 23, 2011, Caprock failed to retain all of its business-related electronic communication in a non-rewritable, non-erasable format. By failing to establish a reasonable supervisory system for email review and retention, Caprock violated NASD Rules 3010(d) and 2110, FINRA Rule 2010, and SEC Rule 17-a-4(b)(4).  SEC Rule 17-a-4(b)(4) requires members to preserve, for a period of not less than three years, the first two years in an easily accessible place, electronic and other communications relating to their business as broker-dealers.

In concluding this settlement, Caprock neither admitted nor denied the charges, but consented to the entry of FINRA’s findings.