A new group of Wall Street firms has agreed to pay more than $81 million in civil penalties to settle US Securities and Exchange Commission record keeping charge failures, the regulator said on Friday.
Settlements with broker-dealers and investment advisers, including Oppenheimer & Co. Inc and US Bancorp, is the latest in a multi-year SEC initiative to investigate how registered financial firms handle employees’ work-related communications on personal devices and apps. , like WhatsApp.
“The SEC’s investigations uncovered widespread and long-standing use of unapproved communications methods, known as off-channel communications,” the agency said in a statement.
The companies admitted that employees “communicate through personal text messages about their employers’ business” and “send and receive out-of-channel communications related to recommendations made or proposed to be made and advice provided or proposed to be provided,” the SEC said.
Since 2021, the SEC has hit many companies including big banks like JPMorgan cHase & Co and Wells Fargo & The Co with fines of $1.7 billion for such compliance failures. Broker-dealers and investment advisers, registered with the SEC, are subject to record-keeping requirements. The increasing use of off-channel communications has complicated the efforts of companies to meet the requirements.
Northwestern Mutual Investment Services companies agreed to pay $16.5 million; Guggenheim agreed to pay $15 million; Oppenheimer will pay $12 million; Cambridge Investment Research firms and Keybank entities will each pay $10 million; Lincoln Financial Advisors will pay $8.5 million; and US Bancorp agreed to pay $8 million, according to SEC orders.
Huntington Investment Company will pay $1.25 million after self-reporting issues, the SEC said.
Companies admit the facts and begin improving compliance policies and procedures, regulators said.
A A lawyer for Guggenheim declined to comment. Counsel for the other companies did not respond to requests for comment.
Is this article valuable?
Here are several articles you may enjoy.
The most important insurance news, in your inbox every business day.
Get the trusted insurance industry newsletter