A dozen prominent investment firms will pay more than $63 million in settlements for failing to properly record employees’ business-related messages on unofficial platforms.
Key Facts:
- The US Securities and Exchange Commission (SEC) announced settlements with 12 investment advisers and broker-dealers.
- Firms such as Blackstone, KKR, Apollo Global, and Charles Schwab are involved.
- Blackstone affiliates agreed to pay $12 million, KKR $11 million, Schwab $10 million, and Apollo $8.5 million.
- The SEC says the firms admitted violating record-keeping rules and agreed to enhance compliance.
- A PJT Partners entity paid the smallest penalty of $600,000 due to self-reporting its lapses.
The Rest of The Story:
The SEC’s action addresses a widespread problem of employees using unauthorized messaging apps for official business. Regulators require firms to keep accurate records to ensure market transparency.
Agency officials say these settlements extend a broader crackdown on record-keeping violations across Wall Street. Some company spokespeople, including representatives from Blackstone and Schwab, say they have already taken steps to improve their policies.
Commentary:
The penalties serve as a reminder that regulators closely monitor communication practices to protect investors. While many of these settlements are modest for large firms, the overall message is clear: procedures that safeguard transparency must be followed.
Observers note that with changes in leadership at the SEC over time, enforcement priorities could shift, though companies are still expected to meet standard record-keeping requirements.
The Bottom Line:
The SEC’s settlements underscore how vital it is for financial companies to track and archive all business-related communications. Despite the hefty fines, the firms say they remain committed to meeting compliance obligations.
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