Major Wall Street Companies Disciplined by SEC, Ordered to Pay $1.1 Billion in Reparations

Major Wall Street Companies Disciplined by SEC, Ordered to Pay $1.1 Billion in Reparations

The US’s SEC just announced that is has charged a total of 16 Wall Street brokers and financial institutions for not keeping their communications records in standardized and legal ways. The Securities and Exchange Commission has penalized all 16 companies with a combines sum of $1.1 billion.

Among the charged companies are some of the biggest American and global financial companies, including: Morgan Stanley & Co. LLC (and affiliates); Barclays Capital Inc; Deutsche Bank Securities Inc. (and affiliates); Bank of America (and affiliates); Citigroup Global Markets Inc; UBS Securities LLC (and affiliates); Goldman Sachs & Co. LLC; and Credit Suisse Securities (USA) LLC.

The regulator commented that it had unraveled “pervasive off-channel communications” that go against all moderns acceptable practices. As SEC reveals, during the January 2018 through September 2021 period some of Wall Street companies’ employees were communicating via text messaging channels on personal mobile devices, thus violating federal security laws by not keeping a record of the exchanges.

SEC disclosed that all companies were directly violating recordkeeping clauses found in the Securities Exchange Act of 1934, and failed to notice these violations.

Since then, SEC added that the companies admitted to using unofficial communication channels and for violating the aforementioned federal laws, and have moved to improving relevant internal policies.

Meanwhile, the CFTC, the nation’s derivatives regulator, has settled with the firm on related charges.

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