Reuters
Published Feb 09, 2024 09:54AM ET
Updated Feb 09, 2024 02:58PM ET
By Chris Prentice and Doina Chiacu
NEW YORK/WASHINGTON (Reuters) -A new group of Wall Street firms has agreed to pay more than $81 million in civil penalties to settle U.S. Securities and Exchange Commission charges of record-keeping failures, the regulator said on Friday.
The settlements with broker-dealers and investment advisers, including Oppenheimer & Co. Inc and U.S. Bancorp, are the latest in a multi-year initiative by the SEC to investigate how registered financial firms handle employees' work-related communications on personal devices and apps, such as WhatsApp.
"The SEC’s investigations uncovered pervasive and longstanding uses of unapproved communication methods, known as off-channel communications," the agency said in a statement.
The companies admitted that employees "communicated through personal text messages about the business of their employers" and "sent and received off-channel communications related to recommendations made or proposed to be made and advice given or proposed to be given," the SEC said.
Since 2021, the SEC has hit dozens of firms including big banks such as JPMorgan Chase & Co (NYSE:JPM) and Wells Fargo & Co with fines of $1.7 billion over such compliance failures. Broker dealers and investment advisers, which are registered with the SEC, are subject to record-keeping requirements. The increasing use of off-channel communications has complicated companies' efforts to meet those requirements.
Northwestern (NASDAQ:NWE) Mutual Investment Services firms 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 U.S. Bancorp agreed to pay $8 million, according to the SEC's orders.
Huntington Investment Company firms will pay $1.25 million after self-reporting the issues, the SEC said.
The firms admitted the facts and have begun improving compliance policies and procedures, regulators said.
A lawyer for Guggenheim declined to comment. Counsel for the other firms did not respond to requests for comment.
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.