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September 24, 2024 at 09:56 AM
What You Need to Know
- The firms included broker-dealers, RIAs and one dually registered firm.
- Stifel and Invesco will each pay $35 million.
- Qatalyst took substantial steps to comply, self-report and remediate and paid no penalty, the SEC said.
The Securities and Exchange Commission continued its crackdown on texting and the use of unauthorized messaging apps Tuesday by ordering 11 firms to pay a combined $88 million for widespread and longstanding failures to maintain and preserve electronic communications.
The firms, which comprise broker-dealers, investment advisors and one dually registered firm, admitted the facts set forth in their respective SEC orders, acknowledged their conduct violated recordkeeping provisions of the federal securities laws and agreed to pay the combined civil penalties.
The firms agreed to pay civil penalties of $88.2 million, as follows:
- Stifel, Nicolaus & Co. Inc., $35 million
- Invesco Distributors Inc., together with Invesco Advisers Inc., $35 million
- CIBC World Markets Corp., together with CIBC Private Wealth Advisors, Inc., $12 million
- Glazer Capital LLC, $2 million
- Intesa Sanpaolo IMI Securities Corp., $1.5 million
- Canaccord Genuity LLC, $1.25 million
- Regions Securities LLC, $750,000
- Alpaca Securities LLC, $400,000
- Focused Wealth Management Inc., $325,000
- Qatalyst Partners LP will not pay a penalty.
“Today’s enforcement actions reflect the range of remedies that parties may face for violating the recordkeeping requirements of the federal securities laws,” said Gurbir Grewal, director of the SEC’s Division of Enforcement. “Widespread and longstanding failures, including where those failures potentially hinder the Commission’s investor protection function by compromising a firm’s response to SEC subpoenas, may result in robust civil penalties.”
On the other hand, Grewal continued, “firms that self-report and otherwise cooperate with the SEC’s investigations may receive significantly reduced penalties.”
Despite recordkeeping failures “that involved communications by senior leadership and persisted after our first recordkeeping matters were announced in 2021, Qatalyst took substantial steps to comply, self-reported, and remediated and, therefore, received a no-penalty resolution,” Grewal said.
Two additional firms, Canaccord and Regions, also self-reported their violations and, as a result, will pay significantly lower civil penalties than they would have otherwise, according to the SEC.
