- The SEC Friday announced charges against ten firms over recordkeeping violations.
- Interactive Brokers and Baird and Co. were among the firms paying a collective $79 million fine.
- Brokers and advisors used off-channel communication while companies failed to maintain or preserve the records of such communication.
Texting brokers and investment advisors have landed their employers in trouble yet again as the Securities and Exchange Commission (SEC) fined ten financial firms over long-standing recordkeeping violations.
Interactive Brokers (IBKR), Robert W. Baird & Co., Nuveen Securities, William Blair & Company, and Fifth Third Securities (FITB) were among the firms charged for “widespread and longstanding failures to maintain and preserve electronic communications.”
The companies agreed to pay a collective fine of $79 million and adjust their compliance policies to meet the recordkeeping provisions of the Securities Exchange Act of 1934, according to a statement from the SEC.
The SEC added that its investigations, dating back to 2019, found “pervasive and longstanding off-channel communications” at the ten firms. Employees at the firms communicated via private text messages about business matters. While the accused firms said their employees sent and received off-channel communications in relation to investment advice, the regulators said the companies violated securities laws by not preserving a large majority of the communications.
The latest SEC enforcement follows a similar action against eleven Wall Street firms in August, which brought collective fines of $549 million.
Firms Fined by the SEC
- Interactive Brokers Corp.: $35 million.
- Robert W. Baird & Co.: $15 million.
- William Blair & Company LLC: $10 million.
- Nuveen Securities LLC: $8.5 million penalty.
- Fifth Third Securities Inc.: $8 million.
- Perella Weinberg Partners LP: $2.5 million.