According to FINRA, TD Private Client Wealth LLC was fined $600,000 for failing to establish and maintain a supervisory system reasonably designed to review correspondence and internal communications, resulting in approximately 3.5 million emails from 691 employee accounts going unreviewed.

The firm often failed to place email accounts for new employees into the electronic queue it established for email review. The firm's written procedures failed to set forth the necessary steps to add accounts to the review queue, identify the departments or personnel responsible for those steps, or identify requirements for when the steps should be taken.

Due to the lack of reasonable written procedures, there were miscommunications between multiple departments about whether email accounts had been placed into the queue and misunderstandings about which department was responsible for particular steps. The firm also failed to maintain a reasonable system to verify that new employees' email accounts were being placed into the review queue, instead relying on an ad hoc and occasional practice of manually comparing lists, which was not reasonable given the volume of employees onboarded during the relevant period.

Furthermore, the firm failed to reasonably investigate and address red flags that employee email accounts were missing from the review queue, and did not investigate why accounts were missing or whether other accounts were missing until after FINRA commenced its investigation.

Email supervision is a critical compliance function that helps firms detect misconduct, unauthorized trading, conflicts of interest, and other violations before they harm customers. When firms fail to review millions of emails over an extended period, they create an environment where misconduct can go undetected. This case demonstrates the importance of firms implementing reliable systems with clear procedures, proper oversight, and regular verification to ensure all employee communications are being reviewed as required.