SEC Captures US$400 Million in Civil Penalties for Records Violations

On August 14, 2024, the SEC announced that it had entered into agreements with 26 firms under which the firms will pay the SEC approximately US$400 million in civil penalties. The penalties are for recordkeeping violations. The 26 firms consist of broker-dealers and investment advisers. Three of the 26 firms self-reported the violations resulting in "significantly lower civil penalties than they would have otherwise" incurred, according to the SEC.

The SEC continues a pattern of aggressive investigation and enforcement for recordkeeping violations which pattern commenced in 2021 when it captured US$125 million from JPMorgan for recordkeeping violations. The SEC appears to be particularly focused on detecting violations by the use of "off-channel communications", e.g., instant messaging, WhatsApp, and other less formal means of communication.