SEC fines 16 Wall Street firms for using personal devices

  • The US Securities and Exchange Commission has calculated 15 broker-dealers and one affiliated investment advisor for widespread and long-standing failures in the maintenance and retention of electronic communications.
  • The companies admitted the facts set forth in their respective SEC filings and acknowledged that their conduct violated the record keeping requirements of the federal securities laws.
  • The companies have agreed to pay combined penalties in excess of $1.1 billion and have begun implementing improvements to their compliance policies and procedures to address these matters.
  • Barclays plc UCS, Bank of America Corp BAK, Citigroup Inc C, Credit Suisse Group AG CS, Deutsche Bank AG DB, Goldman Sachs Group Inc GS, MorganStanley MRSand UBS Group AG UBS each have to pay a fine of 125 million dollars.
  • Jefferies LLC and Nomura Securities International Inc are each paying $50 million. Cantor Fitzgerald & Co. has agreed to pay a $10 million penalty.
  • From January 2018 to September 2021, the banks’ staff routinely communicated business matters, such as debt and equity transactions, with colleagues, clients and other outside advisors using applications on their personal devices, such as text messaging and WhatsApp, the agencies said.
  • The institutions failed to retain most of these face-to-face chats, violating federal regulations requiring broker-dealers and other financial institutions to retain business communications.
  • “Today’s measures – both in relation to the companies involved and the amount of the fines ordered – underline the importance of the recording obligations: they are untouchable. When allegations of wrongdoing or misconduct are made, we need to be able to examine a company’s books and records,” said Gurbir Grewal, director of the SEC’s Division of Enforcement.
  • The bugs occurred across all 16 firms and affected employees at multiple levels, including senior and junior investment bankers and traders.
  • Photo via Wikimedia Commons


Read full story here https://www.benzinga.com/news/large-cap/22/09/29047648/sec-penalizes-16-wall-street-firms-for-using-personal-devices-to-discuss-trades-clients