The U.S. Securities and Exchange Commission (SEC) has announced fines totaling $63 million against 12 financial firms for failing to maintain and preserve electronic communications.
Two weeks into 2025, the SEC has sent a strong message that they will continue to hold firms of all sizes accountable for record keeping violations. The latest enforcement is comprised of nine investment advisers and three broker-dealers and involved personnel at multiple levels of authority, including supervisors and senior managers. The SEC's crackdown around off-channel communications - which began in December 2021 - initially targeted large tier-one banks, but has since expanded to include smaller and mid-size firms.
Notably, one firm received credit for self-reporting its violations and will pay a reduced civil penalty, aligning with the SEC's guidance that cooperation and self-reporting can lead to lesser penalties.
Sanjay Wadhwa, Acting Director of the SEC’s Division of Enforcement said:
“In today’s actions, while holding firms responsible for their recordkeeping failures, the Commission once more recognized and credited a registrant’s self-report, demonstrating yet again that there are tangible benefits to be gained from proactive cooperation.”
This latest enforcement serves as a reminder that, despite potential shifts in regulatory focus with upcoming changes in U.S. administration, fundamental obligations like record keeping remain steadfast. Since its initial $125m penalty in December 2021, the SEC has now fined over 100 firms in excess of $2bn for their record keeping failures.
SteelEye offers a comprehensive, user-friendly communications compliance platform designed to enhance and streamline record keeping and surveillance for financial firms.
The platform captures and secures communications data from a wide range of eComms, vComms, and traditional channels, storing them in a compliant, immutable format that meets regulatory standards. But we don't stop there. SteelEye leverages advanced surveillance algorithms, AI, and intelligent lexicon searches to detect early signs of misconduct and market abuse.
Moreover, SteelEye's proactive monitoring capabilities can identify and flag attempts to switch to unauthorized communication channels, helping you stay ahead of potential risks and ensure regulatory compliance.
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