Twenty-six firms have agreed to pay more than $390m in collective civil penalties to end a massive recordkeeping case.
The combined entities comprised broker-dealers, investment advisers, and dually-registered broker-dealers and investment advisers.
The Securities and Exchange Commission (SEC) laid the penalty at their door for “widespread and longstanding failures by the firms and their personnel to maintain and preserve electronic communications.”
SEC hits twenty-six firms with $390m plus penalty
Federal securities laws have been breached by all named parties. The bill from the regulator came to combined civil penalties of $392.75 million.
Gurbir S. Grewal, Director of the SEC’s Division of Enforcement said that as the “enforcement actions against more than two dozen firms reflect, we remain committed to ensuring compliance with the books and records requirements of the federal securities laws, which are essential to investor protection and well-functioning markets.”
According to the SEC report the charges and the entities are as follows:
- Ameriprise Financial Services, LLC agreed to pay a $50 million penalty
- Edward D. Jones & Co., L.P. agreed to pay a $50 million penalty
- LPL Financial LLC agreed to pay a $50 million penalty
- Raymond James & Associates, Inc. agreed to pay a $50 million penalty
- RBC Capital Markets, LLC agreed to pay a $45 million penalty
- BNY Mellon Securities Corporation, together with Pershing LLC, agreed to pay a $40 million penalty
- TD Securities (USA) LLC, together with TD Private Client Wealth LLC and Epoch Investment Partners, Inc., agreed to pay a $30 million penalty
- Osaic Services, Inc., together with Osaic Wealth, Inc., agreed to pay an $18 million penalty
- Cowen and Company, LLC, together with Cowen Investment Management LLC, agreed to pay a $16.5 million penalty
- Piper Sandler & Co. agreed to pay a $14 million penalty
- First Trust Portfolios L.P. agreed to pay an $8 million penalty
- Apex Clearing Corporation agreed to pay a $6 million penalty
- Truist Securities, Inc., together with Truist Investment Services, Inc. and Truist Advisory Services, Inc., which self-reported, agreed to pay a $5.5 million penalty
- Cetera Advisor Networks LLC, together with Cetera Investment Services LLC, which self-reported, agreed to pay a $4.5 million penalty
- Great Point Capital, LLC agreed to pay a $2 million penalty
- Hilltop Securities Inc., which self-reported, agreed to pay a $1.6 million penalty
- P. Schoenfeld Asset Management LP agreed to pay a $1.25 million penalty
- Haitong International Securities (USA) Inc. agreed to pay a $400,000 penalty
The firms in question also breached securities laws due to “off-channel communications.” These untraceable dialogues make the work of the SEC that much harder as they are not recorded or traceable, but the SEC cracks down on the lack of them in their investigations. Especially when it comes to reportage.
Each of the firms according to the SEC breached “recordkeeping provisions of the Securities Exchange Act, the Investment Advisers Act, or both.”
They will have to pay their fines and have been censured, as well as been sanctioned for the breaches of recordkeeping provisions, as well as prohibited from further breaches.
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