SEC charges 12 firms with record keeping failures

The U.S. securities regulator on Friday said it had fined 12 companies, including brokers, investment advisers and credit rating firms, for record keeping failures.

The Securities and Exchange Commission (SEC) said the companies, including Interactive Brokers Corp, Fifth Third Securities and Nuveen Securities, agreed to pay a total of $79 million and admitted they violated the record keeping rules.

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Reuters first reported the SEC was nearing settlement with several Wall Street firms earlier this week.

Securities and Exchange Commission Chairman Gary Gensler, testifies before the Senate Banking, Housing and Urban Affairs Committee during an oversight hearing on Capitol Hill in Washington, on Sept. 15, 2022.  (Reuters/Evelyn Hockstein)

The SEC move marks the latest enforcement action in the SEC’s two-year crackdown on Wall Street’s use of WhatsApp and other unapproved messaging apps that has so far resulted in more than $2 billion in fines.

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Credit rating agencies DBRS Inc. and Kroll Bond Rating Agency, LLC also agreed to pay civil penalties to settle SEC charges related to the record-keeping failures, the regulator added.

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.

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To settle the charges, DBRS agreed to pay $8 million in civil penalties and KBRA agreed to pay $4 million in civil penalties, the SEC said.

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