Regulatory Wrap Episode 37: The SEC Fines 26 Firms $400M for Recordkeeping Failures
In Regulatory Wrap for the week to August 16, Aarti Agarwal covers the latest round of SEC recordkeeping failure enforcements following firm activities pointing towards possible regulatory action.
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In Regulatory Wrap for the week to August 16, 2024:
In this Regulatory Wrap, we examine the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission’s (CFTC) newest enforcement sweep for recordkeeping failures totaling nearly $400 million, which confirms speculation of imminent fines based on firms’ statements announcing fund allocation for potential settlements.
Highlights:
1. An investment bank and financial services company arranged to settle recordkeeping violations for $14 million with the SEC and $2 million with the CFTC
2. Another firm revealed that it was allotting $50 million to potential settlements with the SEC for off-channel communications
3. Following these instances, the SEC announced that it was fining 26 firms nearly $400 million for widespread recordkeeping failures and failure to reasonably supervise personnel
4. Some firms received reduced penalties for self-reporting prior to investigation
5. Our 2024 Industry Insights Report found that 36.2% of compliance professionals anticipate that compliant communications will be the main area of regulatory focus over the next 12 months – which seems to be the case in view of these enforcements
This episode is brought to you by our Marketing Coordinator, Aarti Agarwal.
Following a break from previous rounds of recordkeeping fines, the SEC and CFTC have come back stronger than ever in emphasizing the severity of communications compliance. To keep from being in the next series of enforcements, firms must ensure they’re effectively capturing and supervising all conversations.
