SEC charges 11 Wall Street firms with recordkeeping failiures

The SEC announced charges against 10 firms in their capacity as broker-dealers and one dually registered broker-dealer and investment adviser for widespread and longstanding failures by the firms and their employees to maintain and preserve electronic communications. The firms admitted the facts set forth in their respective SEC orders. They acknowledged that their conduct violated recordkeeping provisions of the federal securities laws, agreed to pay combined penalties of $289M as outlined below, and have begun implementing improvements to their compliance policies and procedures to address these violations. Wells Fargo Securities (WFC), LLC together with Wells Fargo Clearing Services, LLC and Wells Fargo Advisors Financial Network, LLC agreed to pay a $125M penalty; BNP Paribas Securities Corp (BNPQY) and SG Americas Securities, LLC (SCGLY) have each agreed to pay penalties of $35M; BMO Capital Markets Corp. (BMO) and Mizuho Securities USA LLC have each agreed to pay penalties of $25M; Houlihan Lokey Capital, Inc. (HLI) has agreed to pay a $15M penalty; Moelis & Company LLC (MC) and Wedbush Securities Inc. have each agreed to pay penalties of $10M; and SMBC Nikko Securities America, Inc. has agreed to pay a $9M penalty. “Compliance with the books and records requirements of the federal securities laws is essential to investor protection and well-functioning markets. To date, the Commission has brought 30 enforcement actions and ordered over $1.5B in penalties to drive this foundational message home. And while some broker-dealers and investment advisers have heeded this message, self-reported violations, or improved internal policies and procedures, today’s actions remind us that many still have not,” said Gurbir S. Grewal, Director of the SEC’s Division of Enforcement.