The U.S. Securities and Exchange Commission settled administrative and cease-and-desist proceedings against Merrill Lynch, Pierce, Fenner & Smith Inc. for a systemic failure to promptly hand over e-mails to SEC staff.

The order finds that from October 2003 through February 2005, Merrill Lynch repeatedly failed to promptly furnish to the staff certain emails related to its business as a broker, dealer. The SEC says that Merrill Lynch’s systems, policies, and procedures designed for the prompt production and retention of e-mails were deficient.

The commission ordered Merrill to cease and desist, it censured the firm, required that it comply with undertakings including the retention of an independent consultant to review its systems, policies, and procedures, and to pay a penalty of US$2.5 million Merrill Lynch consented to the entry of the cease and desist order against it without admitting or denying the commission’s findings.