The Firm failed to comply with the Taping Rule, in that it
During a later period, the Firm installed a new system that recorded telephone calls to the hard drives of the computers on representatives’ desks, which was not password protected and was backed up by the firm only once a year, and which allowed representatives access to erase recorded telephone calls.
Carlton Capital, Inc.: Censured; Fined $40,000; Required to Comply with the NASD Rule 3010(b)(2) (the Taping Rule) for an additional three years until February 17, 2012 and to Retain an independent consultant to conduct a comprehensive review of the adequacy of its policies, systems and procedures (written and otherwise) and training related to compliance with the Taping Rule, and adopt and implement the consultant’s recommendations