The Securities and Exchange Commission’s (SEC) and Commodity Futures Trading Commission’s (CFTC) crack down on recordkeeping failures by financial services firms regarding employee use of off-channel communications for business purposes began in December 2021 and hasn’t shown any signs of slowing since.
The agencies have combined to levy nearly $3.6 billion in penalties against firms and their affiliates in response to the violations. Firms have admitted their failures and been required to retain independent compliance consultants to review their off-channel communication recordkeeping policies and procedures and how they address noncompliance by employees.
