More than a dozen financial institutions agreed to pay more than $1 billion for failing to collect texts from employees for their records, the Securities and Exchange Commission announced Tuesday.
Eight banks agreed to pay $125 million apiece, joining JP Morgan Chase Co. JPM, which agreed to pay the same amount late last year, setting a record for fines related to record-keeping. Two other firms agreed to pay $50 million apiece, and one agreed to a $10 million penalty.
The director of the SEC's enforcement division, Gurbir Grewal, said today that the actions, both in terms of firms involved and the size of penalties, underscore the importance of record-keeping requirements. If there are allegations of wrongdoing or misconduct, we must be able to examine a firm's books and records to determine what happened. The banks failed to collect communications from employees' private devices and messaging apps that were involved in business matters from January 2018 to September 2021, across all levels of authority within their organizations, according to the SEC. The banks have begun implementing improvements to their compliance policies and procedures to settle these matters, as well as paying fines, according to the SEC. Barclays PLC BARC, Bank of America Corp. BAC, along with Merrill Lynch, Citigroup Inc. C, Credit Suisse Group AG CSGN, Goldman Sachs Group Inc. GS, Morgan Stanley MS, and UBS Group AG UBS, Jefferies Financial Group Inc. JEF and Nomura Holdings Inc. 8604 will pay $50 million, while Cantor Fitzgerald Inc. will pay $10 million. They have been charged with violating record-keeping provisions and failing to properly supervise, according to the SEC. The firms reached an agreement with the Commodity Futures Trading Commission on similar charges, the SEC said, without providing further details. The investigation continues, according to the agency. Grewal said that other broker dealers and asset managers who are subject to similar requirements under the federal securities laws would be well-served to self-report and self-remediate any deficiencies.