Probes uncovered 'pervasive and longstanding use of unapproved communication methods'
Author of the article:
Bloomberg News
Lydia Beyoud and Tom Schoenberg
Published Aug 14, 2024 • Last updated 2days ago • 2 minute read
Twenty-six financial firms agreed to pay about US$393 million in total fines after the U.S. Securities and Exchange Commission said they failed to keep their employees’ electronic communications, the latest fallout from the regulator’s so-called WhatsApp investigations.
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The SEC said that Ameriprise Financial Inc., Edward D. Jones & Co., LPL Financial Holdings Inc., Raymond James Financial Inc. will pay US$50 million each to settle cases with the agency. A Royal Bank of Canada unit will pay US$45 million, while parts of Toronto-Dominion Bank, Truist Financial Corp. and Bank of New York Mellon Corp. were also among those agreeing to penalties, the SEC said.
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“As today’s 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,” Gurbir Grewal, director of the SEC’s enforcement division, said in a statement on Wednesday.
The fines add to the billions that big banks previously agreed to pay the SEC and the U.S. Commodity Futures Trading Commission to settle similar investigations into use of messages on personal phones and WhatsApp. Financial firms are required to monitor and save communications involving their business to head off potential misconduct.
In its announcement, the SEC said the firms agreeing to pay penalties admitted to breaking record-keeping rules. The agency said its probes “uncovered pervasive and longstanding use of unapproved communication methods.” The CFTC also announced settlements with a few of the firms on Wednesday.
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LPL said in a statement that it cooperated with the SEC’s probe and had taken corrective actions. RBC said it is focused on meeting regulatory requirements and “continuing to enhance our compliance protocols.” Edward Jones said it took the matter seriously, made changes and “will continue to make enhancements to our policies, procedures and practices.”
BNY said it takes its “regulatory responsibilities seriously and is pleased to have resolved this matter.” Representatives for Truist, TD and Ameriprise didn’t immediately respond to requests for comment. Raymond James declined to comment.
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