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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowTwenty-six financial firms agreed to pay about $393 million in total fines after the U.S. Securities and Exchange Commission said they failed to keep their employees’ electronic communications private, the latest fallout from the regulator’s so-called WhatsApp investigations.
The SEC said that Ameriprise Financial Inc., Edward D. Jones & Co., LPL Financial Holdings Inc. and Raymond James Financial Inc. will pay $50 million each to settle cases with the agency. A Royal Bank of Canada unit will pay $45 million, while parts of Toronto-Dominion Bank, Truist Financial Corp. and Bank of New York Mellon Corp. were also among those agreeing to penalties, the SEC said.
“As today’s enforcement actions against more than two dozen firms reflect, we remain committed to ensuring compliance with the books and records requirements of the federal securities laws, which are essential to investor protection and well-functioning markets,” Gurbir Grewal, director of the SEC’s enforcement division, said in a statement on Wednesday.
The fines add to the billions of dollar that big banks previously agreed to pay the SEC and the U.S. Commodity Futures Trading Commission to settle similar investigations into use of messages on personal phones and WhatsApp. Financial firms are required to monitor and save communications involving their business to head off potential misconduct.
In its announcement, the SEC said the firms agreeing to pay penalties admitted to breaking record-keeping rules. The agency said its probes “uncovered pervasive and longstanding use of unapproved communication methods.” The CFTC also announced settlements with a few of the firms on Wednesday.
LPL said in a statement that it cooperated with the SEC’s probe and had taken corrective actions. RBC said it is focused on meeting regulatory requirements and “continuing to enhance our compliance protocols.” Edward Jones said it took the matter seriously, made changes and “will continue to make enhancements to our policies, procedures and practices.”
BNY said it takes its “regulatory responsibilities seriously and is pleased to have resolved this matter.” Representatives for Truist, TD and Ameriprise didn’t immediately respond to requests for comment. Raymond James declined to comment.
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Serious question–what happens to the $393M once it is paid? I realize the agencies involved in the investigation have costs which are probably reimbursed but this certainly would not be close to $393M. Does the excess go to the US Treasury? Is there a victims fund to which funds are deposited? Ultimately, the consumer/client will pay these costs in increased fees, as well as low level employees will be eliminated, losing their job even though they had nothing to do with the policies which allowed for these violations.