The Securities and Exchange Commission (SEC) has levied fines totaling $392.75 million against 26 financial firms for widespread failures to maintain and preserve electronic communications. The charges, announced yesterday (Wednesday), target broker-dealers, investment advisers, and dually-registered entities for violating federal securities laws' recordkeeping provisions.
SEC Fines 26 Firms $392.75 Million for Recordkeeping Violations
The firms, including industry giants Ameriprise Financial Services, Edward D. Jones & Co., LPL Financial, and Raymond James & Associates, each agreed to pay $50 million in penalties. Other notable fines include $45 million for RBC Capital Markets and $40 million for BNY Mellon Securities Corporation and Pershing LLC combined.
Today we announced 26 firms will pay more than $390 million combined to settle charges for widespread recordkeeping failures. https://t.co/A1aPsTt94b pic.twitter.com/tF25ErQs9F
— U.S. Securities and Exchange Commission (@SECGov) August 14, 2024
“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,” SEC Enforcement Director Gurbir S. Grewal, commented.
Check the full list of fines:
Company | Fine Amount |
Ameriprise Financial Services, LLC | $50 million |
Edward D. Jones & Co., L.P. | $50 million |
LPL Financial LLC | $50 million |
Raymond James & Associates, Inc. | $50 million |
RBC Capital Markets, LLC | $45 million |
BNY Mellon Securities Corporation and Pershing LLC | $40 million |
TD Securities (USA) LLC, TD Private Client Wealth LLC, and Epoch Investment Partners, Inc. | $30 million |
Osaic Services, Inc. and Osaic Wealth, Inc. | $18 million |
Cowen and Company, LLC and Cowen Investment Management LLC | $16.5 million |
Piper Sandler & Co. | $14 million |
First Trust Portfolios L.P. | $8 million |
Apex Clearing Corporation | $6 million |
Truist Securities, Inc., Truist Investment Services, Inc., and Truist Advisory Services, Inc. | $5.5 million |
Cetera Advisor Networks LLC and Cetera Investment Services LLC | $4.5 million |
Great Point Capital, LLC | $2 million |
Hilltop Securities Inc. | $1.6 million |
P. Schoenfeld Asset Management LP | $1.25 million |
Haitong International Securities (USA) Inc. | $400,000 |
Three firms—Truist Securities, Cetera Advisor Networks, and Hilltop Securities—received reduced penalties for self-reporting their violations, highlighting the SEC's emphasis on proactive cooperation.
“Among this group of firms, there are several that differentiated themselves by self-reporting prior to the staff’s investigation, demonstrating once again the real benefits of proactive cooperation,” Grewal added.
In addition to the financial penalties, all firms were ordered to cease and desist from future violations and were censured. They have also begun implementing improvements to their compliance policies and procedures.
The Commodity Futures Trading Commission (CFTC) announced separate but related settlements with The Toronto Dominion Bank, Cowen and Company, and Truist Bank.
Other Collective SEC Penalties
This isn't the first instance where the SEC has imposed collective penalties on financial firms in similar circumstances. In February of this year, the SEC took action against 16 broker-dealers and financial advisors, including notable entities like Guggenheim and Oppenheimer. These firms were penalized for failing to maintain electronic communications, accruing civil penalties totaling over $81 million.
Last year, the US securities regulator levied fines totaling USD $289 million against 11 broker-dealers for purported violations of recordkeeping regulations. The SEC issued cease and desist orders to these companies, which have acknowledged the infractions.
One of the larger penalties occurred in 2022 when 16 Wall Street firms paid a collective $1.1 billion for “off-channel communications.” Among the penalized firms were major banks such as Barclays, Bank of America, Goldman Sachs, and UBS.
