04.03.24

SEC Says Self-Reporting Key Factor in Reducing Off-Channel Communication Fines

by: Mengqi Sun

A financial firm’s decision to report recordkeeping rule violations directly to the U.S. Securities and Exchange Commission (SEC) can potentially reduce the fine it receives, said
Sanjay Wadhwa, deputy director of the SEC’s enforcement division. Wadhwa detailed how the regulator assesses fines in such cases, adding that he was responding to “a critique from the defense bar” that the agency was “picking numbers at random.” The SEC has boosted enforcement against Wall Street firms that use prohibited messaging apps to do business. Since December 2021, the SEC has filed charges against 60 firms and imposed more than US$1.7 billion in fines for failing to maintain and preserve electronic communication. The enforcement initiative has expanded in recent months to include investment advisors.

Read the full article on The Wall Street Journal