The U.S. Securities and Exchange Commission (SEC) announced that 26 financial firms, including broker-dealers and registered investment advisers, have agreed to pay a total of $392.75 million in civil penalties for failing to maintain records of off-channel communications.
The SEC charged each firm with violating specific recordkeeping requirements under the Securities Exchange Act, the Investment Advisers Act, or both. Additionally, the firms faced charges for failing to supervise their staff to prevent and detect these violations, according to the agency.
The SEC also stated that each firm was censured and ordered to cease and desist from further breaches of the relevant recordkeeping rules.
The SEC’s enforcement action targeted firms including Ameriprise Financial Services, BNY Mellon Securities Corporation, Edward D. Jones & Co., LPL Financial, and RBC Capital Markets, among others. Each firm admitted to violating federal securities laws related to recordkeeping and has begun implementing improvements to address these issues.
Some of the largest fines were as follows:
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- Ameriprise Financial Services: $50 million
- Edward D. Jones & Co.: $50 million
- LPL Financial: $50 million
- Raymond James & Associates: $50 million
- RBC Capital Markets: $45 million
- BNY Mellon Securities Corporation and Pershing: $40 million
- TD Securities (USA), TD Private Client Wealth, and Epoch Investment Partners: $30 million
- Osaic Wealth: $18 million
Additional penalties were levied against firms like Apex Clearing Corporation, Cowen and Company, First Trust Portfolios, and Haitong International Securities (USA), totaling $34.15 million.
Three firms—Cetera Advisor Networks, Hilltop Securities, and Truist Securities—self-reported their violations, leading to reduced penalties.
The SEC remains “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,” Gurbir Grewal, director of the SEC’s Division of Enforcement, said in a statement.
In a separate move, the Commodity Futures Trading Commission reached settlements with The Toronto Dominion Bank, Cowen and Company, and Truist Bank over similar issues.
Earlier in February, the SEC ordered 16 firms to cough up a total of $81 million to settle charges related to off-channel communications. Just last week, Raymond James agreed to pay $50 million to settle a similar investigation with the SEC, and LPL said back in May that it would also pay $50 million to settle related allegations.
