Canaccord Genuity Inc., fka Canaccord Adams, Inc., of Boston, MA, accepted a $40K fine to settle FINRA charges that, as an active  participant in the U.S. PIPE - Private Investment in Private Equity - market, it had numerous supervisory and internal control deficiencies with respect to its PIPE business.  FINRA found deficiences with its information barrier [fka 'Chinese Wall'] procedures;

• it failed to track employees who were brought “over the wall” on specific PIPE transactions;
• while there was a procedure for maintaining a "wall-crossing log," the firm didn't maintain one;
• stored information about over-the-wall employees in a computer file that was not readily accessible to persons with responsibilities to monitor trading and review emails of employees brought over the wall on investment banking matters.
• it failed to maintain a specific log of employee transactions in securities on the firm’s grey list and/or restricted list;
• it was unable to provide documentation evidencing that it had investigated employee trading in grey list securities to determine whether employees had misused material, non-public information.

FINRA also found deficiencies with monitoring the flow of information concerning PIPE transactions to potential investors:

• while sales persons were required to obtain verbal agreements from potential investors to keep information concerning PIPE transactions confidential, and to refrain from trading on such information, the firm didn't reasonably ensure that the procedure was followed or document that such verbal agreements were obtained.
• information that was maintained concerning the disclosure of information on PIPE transactions was not used for supervisory or compliance purposes.

Canaccord's s system for reviewing email correspondence also was found to be unreasonable:

• while the firm required the review of a sample of email communications, sampling included mail boxes for users no longer employed at the firm.
• Compliance employees, at their discretion, were permitted to mark emails as reviewed based solely on a review of the sender’s name, recipient’s name and subject line of an email
  • i.e. - the firm permitted "bulk review" of emails without any written guidelines informing compliance staff of the parameters for such review.
• firm utilized an Internet chat room system that allowed members of its business units, including but not limited to investment bankers and research analysts, to communicate and/or review each other’s communications.
• firm didn't have in place any written procedures relevant to monitoring internal communications between its business units on the internal chat room system;  nor could it document such communication was actively monitored. 

This is (FINRA Case #2008012243901.   [FINRA March Disciplinary Actions]