Published on Mar 8th, 2023 |

SEC Continues to Investigate Recordkeeping Practices

News & Alerts

Brief Introduction

It was announced that multiple Firms (Blackrock, Blackstone, Stifel, Citadel, Point72, Wells Fargo, SG Americas Securities) over the past weeks are under investigation by the SEC related to recordkeeping practices of employee communications, more specifically off channel communications.

The SEC charged over $6.1 billion in settlements in 2022. Of that amount, at least a billion dollars consisted of penalties for recordkeeping failures. The SEC is focusing on the practices of Private Equity Firms, and Money Managers. 

As the SEC continues to push its regulatory agenda for 2023, it appears that the SEC plans to widen its investigation into the industry’s record keeping practices.

What Is Being Investigated?

What Is Being Investigated?

  • The SEC is reportedly focused on record preservation requirements for use of personal devices and other off-channel communications by Broker Dealers and Registered Investment Advisers.
  • In the past month these Firms have been working with regulatory investigations related to employee communications.
  • Examples of areas reviewed include:
    • All written compliance and operational policies and procedures addressing marketing and advertising activities.
    • There has been requests on copies of all advertisements and marketing materials distributed, presented, or made available to more than one client/investor or prospective client/investor, that offer any type of advisory service or that are used to solicit clients/investors.

Vigilant's Final Conclusion

Vigilant’s Final Conclusion

The recordkeeping requirements related to Broker Dealer and Registered Investment Adviser business activities have been the source of major regulatory burden for many large name firms in the past two years.

As we enter the second half of Q1, it is evident that the SEC continues to aggressively investigate recordkeeping practices.

It would be prudent for firms to review their compliance policies and procedures as it relates to Books and Records for text messaging and other off channel communications to ensure that they will hold up against SEC scrutiny.

With deep industry insight and extensive, customizable compliance support, Vigilant is ready to help your firm decrease its risk of potential regulatory burden.

Contact Us/Request A Proposal Today