Recordkeeping Violations Display No Slow Down | $1.3M in Fines
SEC RELEASES
Introduction
Recordkeeping failures have been costly for multiple Firms in the past few years. We have seen recent recordkeeping failures cause millions in charges. One announcement in August of 2024 involved twenty six (26) Firms being charged a total of almost $400 million in penalties. With no intention of relenting, the SEC announced on September 17th that twelve (12) Municipal Advisors were charged.
What Happened?
- Twelve (12) Municipal Advisors were charged a total of $1.3 million in fines.
- During their respective relevant periods, the Firms did not maintain and preserve electronic communications sent and received by employees relating to business operations.
- Firm employees used off-channel electronic communication methods that involved business communications.
- Senior leadership did not properly supervise employees in a manner reasonably designed to ensure compliance, and in many instances senior leadership also communicated off-channel.
Vigilant’s Conclusion
It is essential that Firm leadership clamps down on the use of off-channel communications.
Vigilant regularly discusses the importance of educating Firm employees, enforcing policies, and providing leadership to help create a culture of compliance.
Reach out to us today if you have any questions or concerns.