Regulators on Friday fined eight companies a combined $111 million over record-keeping lapses, the latest in a series of enforcement actions levied over Wall Street’s use of WhatsApp and other unapproved messaging channels for discussing business.
The Securities and Exchange Commission said eight broker-dealers, investment advisers, and rating agencies, including Perella Weinberg, Interactive Brokers, Fifth Third Securities, and Nuveen Securities, had agreed to pay a combined $91 million in penalties to the agency.
Interactive Brokers also agreed to pay the Commodity Futures Trading Commission $20 million to settle related charges.
Lawyers for the companies either did not immediately respond to requests for comment or declined to comment.
Reuters first reported earlier this week that the SEC was nearing a settlement with several Wall Street firms over record-keeping failures.
The settlements mark the latest enforcement actions in the SEC’s two-year crackdown on Wall Street’s use of unapproved messaging apps, which has so far resulted in more than $2 billion in fines.
Because companies do not surveil personal messaging channels, using them to discuss business puts SEC-regulated employers in breach of requirements to record all business communications. The SEC has said such records are critical for guarding against fraud and other misconduct.
“By failing to maintain and preserve required records, certain of the firms likely deprived the SEC of these off-channel communications in various SEC investigations,” the agency wrote.
The failures involved employees at different levels of authority, including supervisors and senior managers.
Credit rating agencies DBRS Inc. and Kroll Bond Rating Agency LLC agreed to pay $8 million and $4 million respectively.
Employees at both firms failed to preserve electronic communications, including off-channel messages on personal and work-issued devices, the SEC said. DBRS was also charged with violations related to the ratings of certain commercial mortgage-backed securities.
Robert W. Baird & Co. and William Blair & Company also settled.
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