Latest off-channel comms sweep nets SEC, CFTC $477M in fines

Two regulators doled out more than $477 million in fines on a new group of broker-dealers, investment advisers, and swaps dealers that failed to maintain and preserve the electronic communications of their employees, bringing total such fines issued since 2021 to $3.2 billion.

The fines, announced Wednesday by the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC), are part of an ongoing enforcement sweep of off-channel communication violations that officials have mentioned in public repeatedly.

The agencies said the violations were long-standing and pervasive, involving junior employees as well as senior managers who were supposed to be enforcing policies that required employees to use electronic communications that were monitored and recorded. The policies forbade the use of nonapproved communication tools, like personal emails, chats, and instant messaging apps to conduct company business.