- Chief Compliance Officer and VP of Legal Affairs, Arrow Electronics
By 
Kyle Brasseur2023-09-29T15:31:00
A dozen financial services firms were penalized by the Securities and Exchange Commission (SEC) as the agency continues its enforcement sweep of recordkeeping violations regarding employee use of off-channel communications for business purposes.
The latest round of fines announced Friday targeted broker-dealers, investment advisers, and credit rating agencies. The largest penalty the SEC assessed was $35 million against Interactive Brokers Corp. and its affiliate Interactive Brokers LLC. The Commodity Futures Trading Commission (CFTC) also fined Interactive Brokers $20 million.
The CFTC did not levy any additional penalties against firms disciplined by the SEC. In previous sweeps, the agencies combined to dish out fines totaling $200 million or more to many of the world’s largest banks, including Bank of America, Barclays, Citi, Credit Suisse, Deutsche Bank, Goldman Sachs, Morgan Stanley, UBS, and Wells Fargo.
THIS IS MEMBERS-ONLY CONTENT. To continue reading, choose one of the options below.
News and analysis for the well-informed compliance or audit exec. Select an option and click continue.
Annual Membership $499 Value offer
Full price one year membership with auto-renewal.
Membership $599
One-year only, no auto-renewal.
The Securities and Exchange Commission and Commodity Futures Trading Commission have combined to levy nearly $3.5 billion in penalties (so far) against firms and their affiliates in response to recordkeeping failures regarding employee use of off-channel communications for business purposes.
A New York state law that takes effect next year will make it more difficult for registered investment advisers in the state to conduct proactive testing for violations of their firms’ off-channel communication policies.
Businesses must step up their internal policing and do a better job of reporting violations to the Securities and Exchange Commission, according to Gurbir Grewal, director of the agency’s Enforcement Division.
A bank examiner and senior manager at the Federal Reserve Bank of Richmond pled guilty to insider trading after allegedly misappropriating confidential information on seven banks to make profitable trades.
New York-based investment firm Drexel Hamilton will pay more than $1.1 million in penalties, with four current and former employees paying fines as well over committing hundreds of violations of rules regarding the sale of municipal bonds.
A publicly traded cryptocurrency mining company will pay $10 million and completely change its business model to one with “lower corruption risk” as part of a settlement over violations of the Foreign Corrupt Practices Act (FCPA), two regulators announced.
