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Key Takeaways
- The Securities and Exchange Commission has fined 16 companies $81 million because their employees communicated about business on private texts and did not save the messages.
- The SEC requires financial companies to save communications in case the commission investigates wrongdoing.
- The regulator has made a point of enforcing its communication rules in recent years, and has fined companies billions for recordkeeping violations.
More companies are in the Securities and Exchange Commission’s crosshairs because of their employees’ communications.
The Securities and Exchange Commission (SEC) fined 16 financial companies $81 million because their employees talked about business over private text messages, the commission said Friday. The broker-dealer firms agreed to pay fines ranging from $1.25 million to $16.5 million, the commission said.
The fines are the latest in a wave of similar penalties for Wall Street firms over the last two years targeting “off-channel” communications. The federal regulator requires the companies it oversees to do business using official channels and preserve the messages so that they can be reviewed if and when the SEC investigates wrongdoing.
“Today’s actions against these 16 firms result from our continuing efforts to ensure that all regulated entities comply with the recordkeeping requirements, which are essential to our ability to monitor and enforce compliance with the federal securities laws,” Gurbir S. Grewal, director of the SEC’s division of enforcement, said in a prepared statement.
The companies paying fines are:
- Northwestern Mutual Investment Services (NMIS): $16.5 million
- Guggenheim Securities: $15 million
- Oppenheimer: $12 million
- Cambridge: $10 million
- Key Investment Services and KeyBanc Capital Markets: $10 million
- Lincoln Financial: $8.5 million
- U.S. Bancorp: $8 million
- Huntington: $1.25 million
The smaller fine for Huntington reflects the company’s self-reporting of problems and cooperation, Grewal said.