SEC fines 16 Wall Street firms $1.1bn for recordkeeping failures

The US Securities and Exchange Commission (SEC) has indicted 16 Wall Street firms for their “long-standing failure” to maintain electronic communications in violation of federal securities laws.

SEC fines 16 $1.1 billion Wall Street companies for violating federal securities laws

Fifteen broker-dealers and one investment advisor agreed to pay more than $1.1 billion in fines for violating the record-keeping provisions of the Securities Exchange Act of 1934.

According to the SEC, between January 2018 and September 2021, employees at all companies routinely used messaging applications on personal devices to discuss internal business issues.

The SEC alleges that most of these “pervasive off-channel communications” were not maintained or stored in violation of federal securities laws.

SEC Chairman Gary Gensler has said recordkeeping and book and record obligations are “essential to maintaining the integrity of the market.”

“As technology changes, it becomes even more important for registrants to properly communicate about business issues within official channels, and those communications must be maintained and preserved,” adds Gensler. .

Eight companies and five affiliates each agreed to pay $125 million. Barclays Capital, Bank of America Securities, Citigroup Global Markets, Credit Suisse Securities, Deutsche Bank Securities (and two affiliates), Goldman Sachs, Morgan Stanley (and MSSB), UBS Securities ( and UBS Financial Services) .

Jefferies and Nomura Securities agreed to pay $50 million each. A company called Kantor Fitzgerald agreed to pay a $10 million penalty.

In addition to the aforementioned penalties, both companies have agreed to strengthen their compliance policies and procedures.

Gurbir Grewal, Director of the SEC’s Enforcement Division, said record-keeping requirements are “sacred.”

Grewal adds:

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