In today's regulatory environment, failing to properly manage business documents isn't just an internal risk — it can result in massive financial penalties, operational disruptions, and reputational damage.

Let’s break down the real-world consequences and who enforces these rules.

EU: GDPR and MiFID II Requirements

In the European Union, document retention is governed by several regulations, most notably:

• GDPR (General Data Protection Regulation) — Articles 5 and 32 mandate secure storage and the ability to retrieve personal data upon request.

• MiFID II — Financial institutions must store client communications and transaction records for at least five years, in a tamper-proof and easily retrievable format.

Non-compliance penalties include:

• Fines of up to €20 million or 4% of global annual revenue — whichever is higher.

• Suspension or revocation of business licenses (especially for financial services firms).

• Damage to reputation, leading to loss of clients and investor trust.

• Increased scrutiny and additional audits by regulatory bodies.

Who enforces it?

• National data protection authorities (e.g., CNIL in France, BfDI in Germany, AZOP in Croatia).

• ESMA (European Securities and Markets Authority) oversees financial institutions together with national regulators.

US: SEC and FINRA Document Retention Rules

In the United States, financial institutions must comply with:

• SEC Rule 17a-4 — Requires broker-dealers to preserve electronic records in a non-rewritable, non-erasable format.

• FINRA Rule 4511 — Requires firms to maintain books and records for specified periods and in specified formats.

Non-compliance penalties include:

• Fines from hundreds of thousands to several million dollars.

• Business restrictions or license suspension.

• Court cases and, in severe cases, criminal liability for executives.

• Mandatory third-party audits and ongoing monitoring by regulators.

Who enforces it?

• SEC (Securities and Exchange Commission) — Main financial regulator.

• FINRA (Financial Industry Regulatory Authority) — Oversees broker-dealers and investment firms.

• CFTC — Regulates commodity and futures markets and enforces record-keeping rules.

Examples of Major Penalties Due to Poor Document Retention

Around the world, many financial institutions have been fined heavily for failing to properly manage and store their records. Here are some notable cases:

United States 🇺🇸

• Wells Fargo – $185 million (2016)
  Reason: Improper handling and archiving of customer data, including unauthorized account openings and inadequate documentation practices.
  Regulation: SEC, CFPB.

• Deutsche Bank – $630 million (2017)
  Reason: Inadequate record-keeping and failure to document suspicious financial transactions properly.
  Regulation: U.S. Department of Justice, New York Department of Financial Services.

Germany 🇩🇪

• Deutsche Bank – €13.5 million (2020)
  Reason: Deficiencies in maintaining proper business records and reporting practices.
  Regulation: BaFin (Federal Financial Supervisory Authority).

Switzerland 🇨🇭

• UBS – $1.5 billion (2009)
  Reason: Poor documentation practices related to helping clients evade U.S. taxes.
  Regulation: U.S. SEC and Department of Justice.

United Kingdom 🇬🇧

• British Airways – £183 million (2019)
  Reason: Inadequate data storage security leading to data breaches, affecting millions of customers.
  Regulation: ICO (Information Commissioner’s Office), GDPR.

• Equifax UK – £500,000 (2018)
  Reason: Data breach and failure to protect customer information adequately.
  Regulation: ICO, GDPR.

Austria 🇦🇹

• Raiffeisen Bank International – €4.5 million (2017)
  Reason: Improper maintenance and documentation of financial transactions under EU reporting obligations.
  Regulation: Austrian Financial Market Authority (FMA).

France 🇫🇷

• Orange – €350,000 (2018)
  Reason: Poor management of customer personal data and non-compliance with GDPR obligations.
  Regulation: CNIL (French Data Protection Authority).

• Google France – €50 million (2019)
  Reason: Lack of transparency in data management and improper storage of personal information.
  Regulation: CNIL, GDPR.

Why It Matters More Than Ever

Beyond fines and audits, poor document management directly affects operational efficiency.
During an audit, being able to instantly show exactly which documents were reviewed can save days of work, prevent disputes, and demonstrate full compliance.

At KORTO.io, we make document management effortless — ensuring not just safe storage, but real-time access, audit tracking, and full compliance with the latest EU and US regulations.

Would you like to see exactly which documents auditors reviewed — with just one click?

Contact us!