- Chief Compliance Officer and VP of Legal Affairs, Arrow Electronics
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 $2.8 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.
The below table summarizes the SEC’s and CFTC’s enforcement activities regarding off-channel communications. Violations by affiliates have been accounted for under their parent companies for presentation purposes.
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A dozen financial services firms were penalized by the Securities and Exchange Commission as the agency continues its enforcement sweep of recordkeeping violations regarding employee use of off-channel communications for business purposes.
The Securities and Exchange Commission and Commodity Futures Trading Commission continued their crackdown on financial firms’ recordkeeping failures regarding employee use of off-channel communications with $555 million in total fines levied against nine institutions and their affiliates.
Eleven banks, investment firms, and their affiliates will pay a total of more than $1.8 billion in fines for “widespread and longstanding failures” in monitoring, maintaining, and preserving electronic communications by employees.
There are a slew of compliance lessons to be learned from the $4.3 billion settlement that Binance, the world’s largest cryptocurrency exchange, reached with the U.S. government.
Bank of America will pay a $12 million penalty for allegedly reporting false mortgage lending data to the federal government, under a settlement reached with the Consumer Financial Protection Bureau.
First American Title Insurance Company agreed to pay a $1 million fine and implement stronger compliance measures for not securing customers’ personal data, the New York State Department of Financial Services announced.
