A Florida federal court has awarded the American Securities Association a key victory in the group’s years-long challenge against the Securities and Exchange Commission for refusing to produce documents under the Freedom of Information Act related to how the agency calculated fines for off-channel communication violations.
ASA “has scored a partial win in a long-running fight against the Securities and Exchange Commission over what it argues has been an unfairly opaque process implemented during an industry-wide crackdown on recordkeeping violations,” Valerie Mirko, partner and leader of the securities regulation and litigation practice at Armstrong Teasdale in Washington, told ThinkAdvisor in an email Wednesday.
In a March 5 order, Judge Steven Merryday of the U.S. District Court for the Middle District of Florida directed the SEC “to disclose sections of 52 spreadsheets used by enforcement staff to size monetary penalties against broker-dealers that either were under investigation or had settled over recordkeeping failures,” Mirko said.
A Texas broker-dealer offering digital wealth management services told a US appeals court the firm received harsher settlement terms than other targets of a Biden-era SEC crackdown on companies accused of failing to preserve business-related communications on employees’ personal devices. The Securities and Exchange Commission denied a bid from Apex Clearing Corp. to alter its settlement over off-channel communications while…
The Securities and Exchange Commission chairman on Tuesday described the agency’s handling of off-channel communications over the last couple of years as “not the way a regulator should act.” SEC Chair Paul Atkins was responding to a question posed by Ken Bentsen, president and CEO of the Securities Industry and Financial Markets Association, at the group’s annual meeting in Washington,…
Let’s Not Do That Again Gen AI tools are booming in popularity because they offer significant employee efficiency and productivity benefits. While many firms have resisted adopting enterprise AI tools because of legitimate concerns, wholesale prohibitions on AI meeting tools and other GenAI applications pose similar risks as off-channel communications. For example, just as outright bans on text messaging historically…
Wall Street’s widespread use of electronic communication platforms such as WhatsApp, Signal, and iMessage prompted an SEC sweep of regulated firms’ recordkeeping and surveillance under the past administration, but the regulator is unlikely to abandon the crackdown even as other priorities shift. In one of his final moves as acting chairman of the Securities and Exchange Commission, Mark Uyeda last…
Another of the more controversial enforcement areas for the SEC—off-channel communications—is likely at an end. As perhaps a final act in this area, the SEC recently denied a motion by a number of firms that sought modifications to their settlement agreements with the SEC to bring those settlements in line with settlements the SEC reached in January 2025 that were…
The Securities and Exchange Commission today announced charges against nine investment advisers and three broker-dealers for failures by the firms and their personnel to maintain and preserve electronic communications, in violation of recordkeeping provisions of the federal securities laws. The firms admitted the facts set forth in their respective SEC orders, acknowledged that their conduct violated recordkeeping provisions of the…
The regulators zinged the companies for failing to preserve text messages between employees and customers via phone apps outside the communication channels investment firms normally monitor. Despite the headline-grabbing size of the penalties, and the deluge of training programs firms have launched to bolster compliance, use of the apps remains pervasive. But the enforcement spree, like many of SEC Chair…
The takeaway “from the scale of the initiative, both in terms of the dollar amount of penalties and number of firms charged, is that it has shone a light on how widespread noncompliance was when it came to this practice,” Wadhwa said. “And, given how far back in time this practice went, it was not the result of folks working…
The Securities and Exchange Commission today announced charges against 12 firms, comprising broker-dealers, investment advisers, and one dually-registered broker-dealer and investment adviser, for widespread and longstanding failures by the firms and their personnel to maintain and preserve electronic communications in violation of recordkeeping provisions of the federal securities laws. The firms admitted the facts set forth in their respective SEC…