The Financial Industry Regulatory Authority slapped Barclays Capital with a $3.75 million fine last month for systemic failures to preserve electronic records for more than a decade.

Federal securities laws and FINRA rules require that business-related electronic records be kept in non-rewritable, non-erasable format—also referred to as “write-once, read-many" (WORM) format—to prevent alteration. The requirements are aimed at protecting investors and help maintain anti-fraud provisions and financial responsibility standards.

“Ensuring the integrity, accuracy and accessibility of electronic books and records is essential to a firm's ability to meet its compliance obligations,” said FINRA Executive Vice President and Chief of Enforcement Brad Bennett. “The format errors in this case made it nearly impossible for Barclays to verify that these key materials remained in an unaltered condition.”

According to FINRA, Barclays failed to preserve many of its required electronic books and records—including order and trade ticket data, trade confirmations, blotters, account records and other similar records—in WORM format from at least 2002 to 2012. “The issues were widespread and included all of the firm's business areas,” FINRA stated. “Thus, Barclays was unable to determine whether all of its electronic books and records were maintained in an unaltered condition.”

FINRA also found that Barclays failed to properly retain certain attachments to Bloomberg e-mails from May 2007 to May 2010, and additionally failed to properly retain approximately 3.3 million Bloomberg instant messages from October 2008 to May 2010. In addition to violating federal securities laws and FINRA rules, such failures “adversely impacted Barclay's ability to respond to requests for electronic communications in regulatory and civil matters,” FINRA stated.

Barclays further failed to establish and maintain an adequate system and written procedures that were “reasonably designed to achieve compliance” with not only FINRA, but also the Securities and Exchange Commission and the National Association of Securities Dealers, “as well as to timely detect and remedy deficiencies related to those requirements.”

In reaching a settlement, Barclays neither admitted nor denied the charges.