Published on Jan 12th, 2024 |

Electronic Communication Recordkeeping and SEC Enforcements

Vigilant Insights


Electronic communication recordkeeping and supervision continue to be a priority for the SEC during Examinations; they have indicated that the fines will continue until they feel that Firms are maintaining consistent compliance.

As FY 2024 is already in full stride, looking back at the history of SEC enforcement related to electronic communication recordkeeping should serve as a reminder to compliance officers how great the regulatory burden can become for missing this crucial task.

Major Enforcement Action in 2022

Major Enforcement Action in 2022

  • On September 27th, 2022, 16 Firms were charged over $1.1 Billion in penalties.
  • The SEC found “widespread and longstanding failures” related to electronic communication compliance.
  • Compliance failures were discovered at all levels of the Firms including supervisors and senior executives.

SEC Continues Its Focus In 2023

SEC Continues Its Focus In 2023

  • On May 11th, 2023, two Broker Dealers were charged for similar recordkeeping failures that were also labeled as widespread.
  • Fines reached a total of approximately $22.5 million combined.
  • The pervasive use of messaging apps was discussed and noted, with Whatsapp use being a consistent concern.
  • The Firms self-reported and self-remediated, which the SEC acknowledged as a reason for reduced fines.

Industry Failures Continue

Industry Failures Continue

Vigilant's Conclusion

Vigilant’s Conclusion

As we look back at the history of SEC enforcements related to recordkeeping, and evaluate the exam priorities for 2024, Firms are reminded that electronic communication recordkeeping is an industry standard.

The SEC will continue to evaluate recordkeeping practices and supervision. The industry has provided multiple tools for Firms to be successful.

Reach out to industry leaders, such as Vigilant, to evaluate your policies and procedures and help them meet current industry standards.

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