SEC fines 16 broker-dealers and investment advisers

SEC fines 16 broker-dealers and investment advisers

The Securities and Exchange Commission (SEC) has taken decisive action against 16 brokers and financial advisers, including major players such as Guggenheim and Oppenheimer. These firms face consequences for failures to maintain electronic communications, resulting in combined civil penalties exceeding $81 million.

The SEC’s investigations uncovered a practice of using unapproved communication methods, known as out-of-channel communications, at all 16 firms, the regulator said in a statement today (Friday).

This included personal text messages discussing business matters and off-channel communications about investment recommendations and advice. These firms failed to preserve or preserve most of these communications, in violation of federal securities laws.

Gurbir Grewal, Director of the SEC’s Enforcement Division, said: “Today’s actions against these 16 firms result from our ongoing efforts to ensure that all regulated entities comply with recordkeeping requirements, which are essential to our ability to monitor and enforce compliance

COMPATIBILITY

Compliance in finance, banking, investment and insurance refers to following rules or orders set by a government regulatory authority, whether it is providing a service or processing a transaction. Compliance with respect to finance would also be a state of following established guidelines or specifications. This determination may also include efforts to ensure that organizations comply with industry regulations and government legislation. The meaning of Compliance is a

Compliance in finance, banking, investment and insurance refers to following rules or orders set by a government regulatory authority, whether it is providing a service or processing a transaction. Compliance with respect to finance would also be a state of following established guidelines or specifications. This determination may also include efforts to ensure that organizations comply with industry regulations and government legislation. The meaning of Compliance is a
Read this term with federal securities laws.”

As a result of these violations, each firm admitted to the facts described in their respective SEC orders and agreed to pay substantial civil penalties. Northwestern Mutual faces a penalty of $16.5 million, Guggenheim $15 million, Oppenheimer $12 million, Cambridge $10 million, Key $10 million, Lincoln $8.5 million, US Bancorp $8 million and Huntington $1.25 million.

SEC Regulatory Review

Notably, Huntington’s conviction reflects his self-report and voluntary cooperation. The SEC charged each firm with violating recordkeeping provisions and failing to prevent and detect those violations. The errors involved employees at various levels, including supervisors and senior managers. Beyond financial penalties, firms were censured and ordered to stop future violations.

In addition, the companies were ordered to retain independent compliance consultants to conduct thorough reviews of their policies and procedures, particularly regarding the retention of electronic communications found on personal devices.

Last year, the SEC fined ten financial firms $79 million for alleged recordkeeping errors. This crackdown revealed a pattern of inappropriate electronic communication practices between brokers and investment advisers.

The SEC’s enforcement actions targeted five broker-dealers, three broker-dealers and dual-registered investment advisers, and two affiliated investment advisers. In addition to hefty financial penalties, the securities watchdog ordered any offending firm to cease any future violations of the record-keeping provisions.

The Securities and Exchange Commission (SEC) has taken decisive action against 16 brokers and financial advisers, including major players such as Guggenheim and Oppenheimer. These firms face consequences for failures to maintain electronic communications, resulting in combined civil penalties exceeding $81 million.

The SEC’s investigations uncovered a practice of using unapproved communication methods, known as out-of-channel communications, at all 16 firms, the regulator said in a statement today (Friday).

This included personal text messages discussing business matters and off-channel communications about investment recommendations and advice. These firms failed to preserve or preserve most of these communications, in violation of federal securities laws.

Gurbir Grewal, Director of the SEC’s Enforcement Division, said: “Today’s actions against these 16 firms result from our ongoing efforts to ensure that all regulated entities comply with recordkeeping requirements, which are essential to our ability to monitor and enforce compliance

COMPATIBILITY

Compliance in finance, banking, investment and insurance refers to following the rules or orders set by the government regulatory authority, whether providing a service or processing a transaction. Compliance with respect to finance would also be a state of following established guidelines or specifications. This determination may also include efforts to ensure that organizations comply with industry regulations and government legislation. The meaning of Compliance is a

Compliance in finance, banking, investment and insurance refers to following the rules or orders set by the government regulatory authority, whether providing a service or processing a transaction. Compliance with respect to finance would also be a state of following established guidelines or specifications. This determination may also include efforts to ensure that organizations comply with industry regulations and government legislation. The meaning of Compliance is a
Read this term with federal securities laws.”

As a result of these violations, each firm admitted to the facts described in their respective SEC orders and agreed to pay substantial civil penalties. Northwestern Mutual faces a penalty of $16.5 million, Guggenheim $15 million, Oppenheimer $12 million, Cambridge $10 million, Key $10 million, Lincoln $8.5 million, US Bancorp $8 million and Huntington $1.25 million.

SEC Regulatory Review

Notably, Huntington’s conviction reflects his self-report and voluntary cooperation. The SEC charged each firm with violating recordkeeping provisions and failing to prevent and detect those violations. The errors involved employees at various levels, including supervisors and senior managers. Beyond financial penalties, firms were censured and ordered to stop future violations.

In addition, the companies were ordered to retain independent compliance consultants to conduct thorough reviews of their policies and procedures, particularly regarding the retention of electronic communications found on personal devices.

Last year, the SEC fined ten financial firms $79 million for alleged recordkeeping errors. This crackdown revealed a pattern of inappropriate electronic communication practices between brokers and investment advisers.

The SEC’s enforcement actions targeted five broker-dealers, three broker-dealers and dual-registered investment advisers, and two affiliated investment advisers. In addition to hefty financial penalties, the securities watchdog ordered any offending firm to cease any future violations of the record-keeping provisions.

Leave a Comment

Your email address will not be published. Required fields are marked *