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USA's SEC sues ten companies relating to "widespread recordkeeping failures".

BIScom Subsection: 
Author: 
CoNet Administrator

The USA's Securities and Exchange Commission has issued civil proceedings against five broker-dealers, three dually registered broker-dealers and investment advisers, and two affiliated investment advisers for widespread and longstanding failures to maintain and preserve electronic communications. Settlements have been agreed.

Further reading:
Previous action against big name institutions
https://worldmoneylaunderingre...

The question of use of personal devices for regulated communications is not as simple as it seems.
https://worldmoneylaunderingre...

The ten companies have entered into settlement agreements, have acknowledged that their conduct broke securities industry law and regulation and have agreed to pay a combined total of USD79 million.

“One of the orders included in today’s announced actions is not like the others,” said Gurbir S. Grewal, Director of the SEC’s Division of Enforcement. “There are real benefits to self-reporting, remediating and cooperating.”

Interactive Brokers Corp. and affiliate Interactive Brokers LLC (together, Interactive Brokers) agreed to pay a USD35 million penalty;

Robert W. Baird & Co. Inc. agreed to pay a USD15 million penalty;

William Blair & Company LLC and affiliate William Blair Investment Management LLC (WBIM) agreed to pay a USD10 million penalty;

Nuveen Securities LLC agreed to pay a USD8.5 million penalty;

Fifth Third Securities Inc. agreed to pay a USD8 million penalty; and

Perella Weinberg Partners LP (Perella Weinberg), together with Tudor, Pickering, Holt & Co. Securities LLC (TPH) and Perella Weinberg Partners Capital Management LP (Perella Weinberg Capital), which self-reported, agreed to pay a USD2.5 million penalty.

It is serious stuff: The SEC says "The SEC’s investigations uncovered pervasive and longstanding off-channel communications at all 10 [companies]... the broker-dealer firms admitted that, from at least 2019, their employees communicated through personal text messages about the business of their employers, and the investment adviser firms admitted that their employees sent and received off-channel communications related to recommendations made or proposed to be made and advice given or proposed to be given. The firms did not maintain or preserve the substantial majority of these off-channel communications, in [breach] of the federal securities laws. By failing to maintain and preserve required records, certain of the firms [probably] deprived the SEC of these off-channel communications in various SEC investigations. The failures involved employees at multiple levels of authority including supervisors and senior managers."

SEC statement: https://www.sec.gov/news/press...

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