News & Analysis as of

Electronic Communications Broker-Dealer Recordkeeping Requirements

Lowenstein Sandler LLP

Another Wave of SEC Settlements Underscore the Continued Priority of Record Retention Communication Compliance

On August 14, 2024, the U.S. Securities and Exchange Commission (SEC) announced another series of settlements regarding “off-channel communications.”1 As part of its Off-Channel Communications Initiative,2 the SEC settled...more

BCLP

SEC Enforcement Sweep Regarding Off-Channel Communications Nets 26 More Settlements and Over $390 Million in Civil Penalties

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On August 14, 2024 the U.S. Securities and Exchange Commission (the “SEC”) announced settled charges against 26 SEC-registered investment advisers, broker-dealers and dually-registered broker-dealers and investment advisers...more

Sullivan & Worcester

SEC and CFTC Continue Their Lucrative Pursuits of Penalizing Unapproved Communication Methods

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SEC's and CFTC's Enforcement Actions Against Multiple Firms - In its continued pursuit of rooting out and penalizing broker-dealers and investment advisers for their failure to prevent unapproved communication methods, the...more

Morrison & Foerster LLP

Significant Investment Adviser Regulatory Developments in 2024

Alongside the rapid pace of Securities and Exchange Commission (SEC) rulemaking, the SEC and its Staff continue to shape regulatory obligations for investment advisers in 2024 through guidance, alerts, enforcement actions,...more

Stark & Stark

More Than $390 Million in Penalties for Recordkeeping Failures

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The Securities and Exchange Commission (SEC) announced charges against 26 broker-dealers, investment advisers, and dually-registered firms for widespread and longstanding failures to maintain and preserve electronic...more

Seward & Kissel LLP

SEC Settles Charges with Adviser for Recordkeeping Violations and Staff Lays Out Factors Considered in Determining What Penalties...

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Who may be interested: Investment Advisers, Broker-Dealers - Quick Take: The SEC settled charges against an investment adviser for widespread recordkeeping deficiencies related to the adviser’s failure to obtain, maintain...more

BCLP

Regulators Impose Extraordinary Fine Amounts in Recent Off-Channel Communications Enforcement Actions

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The Securities and Exchange Commission (“SEC”) and the Financial Industry Regulatory Authority (“FINRA”) have, in two separate recent settled enforcement actions involving off-channel communications (“OCC”), imposed fine...more

Ogletree, Deakins, Nash, Smoak & Stewart,...

SEC, Federal Regulators Target Employees’ Use of Text Messages, Off-Channel Communications

The U.S. Securities and Exchange Commission (SEC) and other financial regulators are targeting regulated entities over their employees’ use of personal messaging apps and other off-channel electronic communication platforms,...more

Jones Day

SEC Reaffirms Importance of Self-Reporting and Cooperation, but Benefits Remain Ambiguous

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Recently, a senior officer from the SEC's Division of Enforcement defended the penalties the Commission has levied on firms for failing to capture and retain their employees' "off-channel" electronic communications, and, in...more

Lowenstein Sandler LLP

SEC Settlement Highlights Continued Scrutiny of Off-Channel Communications

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On April 3, 2024, the U.S. Securities and Exchange Commission (SEC) announced yet another settlement regarding “off-channel communications.” As we have previously written about, settlements of this type have become...more

Akin Gump Strauss Hauer & Feld LLP

SEC Announces First Off-Channel Communications Enforcement Action Against a Standalone Private Fund Manager

On April 3, 2024, the U.S. Securities and Exchange Commission (SEC) announced its first enforcement action against a registered investment adviser (RIA) with no ties to a broker-dealer regarding so-called “off-channel”...more

Guidepost Solutions LLC

Emerging Expectations from the Latest Enforcement Actions Over Off-Channel Communications

Since December 2021, the U.S. Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) have levied almost $3.0 billion in penalties for longstanding failures by 39 broker-dealers, swap dealers,...more

BCLP

SEC Enforcement Sweep Regarding Off-Channel Communications

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On February 9, 2024 the U.S. Securities and Exchange Commission (the “SEC”) announced charges against 16 registered investment advisers and broker-dealers for pervasive recordkeeping failures related to off-channel...more

Troutman Pepper

How to Avoid a Similar Fate? SEC Charges Firms With Record-Keeping Violations for Off-Channel Communications

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On February 9, the Securities and Exchange Commission (SEC) announced settlements with 16 firms relating to record-keeping violations stemming from off-channel communications totaling $81 million. The 16 firms were five...more

Mayer Brown

WhatsApp All Over Again: The SEC Brings More Recordkeeping Charges Against Broker-Dealers and Investment Advisers for Off-Channel...

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On February 9, 2024, the Securities and Exchange Commission (SEC) announced charges against five broker-dealers, seven dually registered broker-dealers and investment advisers, and four affiliated investment advisers for...more

Carlton Fields

Regulators Hit Jackpot: Off-Channel Communications

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Several years before announcing the first “off-channel” communications enforcement action, the SEC and FINRA cautioned broker-dealers and investment advisers about problematic record-keeping practices involving the use of...more

Thomas Fox - Compliance Evangelist

Messaging App Compliance in Regulated Industries: Lessons from Recent Enforcement Actions

In recent years, regulated industries, particularly broker dealer firms like Wells Fargo and Morgan Stanley, have faced increased scrutiny from regulatory bodies due to their lack of compliance in policing messaging apps. The...more

Ballard Spahr LLP

SEC Nears First Settlement With a Credit Rating Agency in Off-Channel Communications Sweep

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Summary - The Securities and Exchange Commission (SEC) is reportedly nearing a settlement with a nationally recognized statistical rating organization (NRSRO) over its failure to preserve certain credit-ratings...more

Holland & Knight LLP

Do Not Delete: SEC and DOJ Send Serious Messages on Preserving Ephemeral Communications

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Ages ago, hieroglyphics were painstakingly etched into stone. They communicated various types of messages, from fables to business transactions, and lasted thousands of years. Today, we still communicate the same type of...more

Amundsen Davis LLC

Regretful Texts? Texts Cost Broker-Dealers $1.1 Billion

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Broker-dealers are required to maintain records of any communications received relating to the firm’s business. The SEC recently charged 16 broker-dealers with recordkeeping violations for off-channel communications that were...more

Nelson Mullins Riley & Scarborough LLP

Every Buck You Lend, Every Text You Send, the SEC’ll Be Watching You

Take one look at your phone and count how many different message apps you have.  WhatsApp, Facebook Messenger, Snapchat, Telegram, Signal, iMessage.  Those are just some of the most popular messaging applications available...more

Foley Hoag LLP - White Collar Law &...

Companies Should Beware of Employees Texting Business Communications

Text messaging is convenient.  It is an informal and instant mode of communication now available through numerous apps, which allow an individual to use their synced phone, tablet, and computer to quickly fire off messages. ...more

A&O Shearman

SEC And CFTC Orders Concerning Electronic Communications

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On September 27, 2022, the SEC announced charges against affiliates of 11 financial institutions (15 broker-dealers and one investment adviser) for allegedly failing to maintain and preserve electronic communications and...more

Paul Hastings LLP

Ephemeral Messaging at the Office: Avoiding Pitfalls and Establishing Best Practices

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Users of ephemeral messaging applications may intend that their messages be—as the word “ephemeral” suggests—short lived, but the real-world consequences and legal ramifications from improper use of such apps can be anything...more

Seward & Kissel LLP

SEC Charges Sixteen Firms for Recordkeeping Failures Related to Employee Use of Personal Devices

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On September 27, 2022, the Securities and Exchange Commission (“Commission”) entered into a series of settled orders (“Orders”) against 15 broker-dealers and one affiliated investment adviser for widespread failures by the...more

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