Eleven firms to pay a combined $88 million to settle mass recordkeeping failures Twelve firms, which are comprised of broker-dealers, investment advisers, and one dually registered broker-dealer and investment adviser, have been subject to Securities and Exchange Commission (SEC) charges totaling $88 million....
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Twelve firms, which are comprised of broker-dealers, investment advisers, and one dually registered broker-dealer and investment adviser, have been subject to Securities and Exchange Commission (SEC) charges totaling $88 million.
The charges come as the SEC saw the collective in breach of multiple federal securities laws. One of the twelve firms, Qatalyst, will not be given a financial penalty alongside the other eleven entities as they reportedly "self-reported, self-policed, and demonstrated substantial efforts at compliance."
Each of the firms in question and under the regulator's scrutiny was charged more specifically with violating certain recordkeeping provisions of the Securities Exchange Act, the Investment Advisers Act, or a combination of both.
Eleven firms to pay a collective $88 million in fines
Of the eleven entities charged, the SEC reported that the negligence and repeated violations of the Securities Exchange Act the Investment Advisers Act were witnessed by all levels of seniority, involving supervisors and senior managers.
Gurbir S. Grewal, Director of the SEC's Division of Enforcement, said, "Today's enforcement actions reflect the range of remedies that parties may face for violating the recordkeeping requirements of the federal securities laws. Widespread and longstanding failures, including where those failures potentially hinder the Commission's investor protection function by compromising a firm's response to SEC subpoenas, may result in robust civil penalties."
The SEC broke down the entities and the charges laid at their door:
- Stifel, Nicolaus & Company, Inc. agreed to pay a $35 million penalty
- Invesco Distributors, Inc., together with Invesco Advisers, Inc., agreed to pay a $35 million penalty
- CIBC World Markets Corp., together with CIBC Private Wealth Advisors, Inc., agreed to pay a $12 million penalty
- Glazer Capital, LLC agreed to pay a $2 million penalty
- Intesa Sanpaolo IMI Securities Corp., agreed to pay a $1.5 million penalty
- Canaccord Genuity LLC agreed to pay a $1.25 million penalty
- Regions Securities LLC agreed to pay a $750,000 penalty
- Alpaca Securities LLC agreed to pay a $400,000 penalty
- Focused Wealth Management, Inc. agreed to pay a $325,000 penalty
Director Gewal concluded, "On the other hand, firms that self-report and otherwise cooperate with the SEC's investigations may receive significantly reduced penalties." Qatalyst was the firm mentioned by Director Grewal and due to their transparency and efforts at internal investigation, avoided a financial penalty.
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