The U.S. Securities and Exchange Commission has fined three individuals for violations of the Privacy Rule and Safeguards Rule of Regulation S-P. Last year, securities broker-dealer GunnAllen Financial, Inc., sent notice to account holders that it was liquidating and informed them of subsequent options regarding their accounts. A month later, a GunnAllen representative downloaded the accountholders' files to his personal thumb drive and took them to a new firm. The action violated the Privacy Rule, which allows customers to opt out of third-party disclosures, and the Safeguards Rule, which blocks transfers when customers are not given that choice. Two individuals were fined $20,000 and the third $15,000 for "aiding and abetting GunnAllen's rule violations," writes Andrew Smith in this Daily Dashboard exclusive.
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