US charges 26 broker, investment firms for recordkeeping failures

By Ovunc Kutlu

ISTANBUL (AA) - The US Securities and Exchange Commission (SEC) announced charges Wednesday against a total of 26 broker-dealers and investment advisers for widespread and longstanding failures to maintain and preserve electronic communications.

The firms acknowledged that their conduct violated recordkeeping provisions of federal securities laws, while they agreed to pay combined civil penalties of $392.75 million.

Three of the firms self-reported their violations, and as a result, they will pay significantly lower civil penalties than they would have otherwise, said the SEC.

The companies, in addition, have started implementing improvements to their compliance policies and procedures to address these violations, it added.

"Each of the SEC’s investigations uncovered pervasive and longstanding use of unapproved communication methods, known as off-channel communications, at these firms," it noted.

In addition, the Commodity Futures Trading Commission announced separate settlements with three other banks for related conduct.