The US Securities and Exchange Commission (SEC) has fined 11 Wall Street firms a total of $289 million for widespread “off-channel” communications using personal messaging apps, violating recordkeeping regulations dating back to 2019.
Facts
- 11 Wall Street firms charged by SEC for “off-channel” communications dating to 2019.
- Employees used personal messaging platforms like iMessage, WhatsApp, and Signal for business matters.
- Violation occurred across various seniority levels, from supervisors to senior executives.
- Firms failed to preserve these communications, as required by federal securities law.
- SEC fined the group $289 million for recordkeeping violations and inadequate supervision.
- Wells Fargo, BNP Paribas, SG Americas, BMO Capital Markets, Mizuho Securities fined varying amounts.
- Houlihan Lokey, Moelis & Company, SMBC Nikko Securities also fined.
- Wedbush Securities received additional charges and a $10 million penalty for non-compliance.
- SEC initiated 30 enforcement actions, generating $1.5 billion in fines for recordkeeping violations.
- SEC encourages firms to self-report, cooperate, and remediate for better outcomes.
- Proper recordkeeping is essential for investor protection and market functionality, says SEC officials.
