The SEC and CFTC fined Wells Fargo and its two affiliates, BNP Paribas, Société Générale (SocGen), Bank of Montreal (BMO), Wedbush Securities, Moelis & Co., Houlihan Lokey, Mizuho and SMBC Nikko Securities, for record-keeping failures
The US Securities and Exchange Commission headquarters. (Credit: AgnosticPreachersKid/Wikipedia)
The US Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) have fined 11 Wall Street firms $549m over their employees’ use of personal messaging apps for business dealings.
The firms include Wells Fargo and its two affiliates, BNP Paribas, Société Générale (SocGen), Bank of Montreal (BMO), Wedbush Securities, Moelis & Co., Houlihan Lokey, Mizuho and SMBC Nikko Securities.
According to the SEC, all the firms acknowledged that their conduct violated recordkeeping provisions of the federal securities laws and agreed to pay the penalties.
Wells Fargo, BNP Paribas and SocGen, BMO, Wedbush Securities, Moelis & Company, Houlihan Lokey, Mizuho and SMBC Nikko Securities have agreed to pay $289m to the SEC.
In addition, Wells Fargo, BNP Paribas, SocGen, BMO, and Wedbush will pay an additional $260m to the CFTC for similar violations.
SEC Division of enforcement director Gurbir S Grewal said: “Compliance with the books and records requirements of the federal securities laws is essential to investor protection and well-functioning markets.
SEC Division of enforcement deputy director Sanjay Wadhwa said: “Today’s actions stem from our continuing sweep to ensure that regulated entities, including broker-dealers and investment advisers, comply with their recordkeeping requirements, which are essential for us to monitor and enforce compliance with the federal securities laws.
“Recordkeeping failures such as those here undermine our ability to exercise effective regulatory oversight, often at the expense of investors.”
The SEC and CFTC have been investigating several broker-dealers over failures in record-keeping provisions, since late 2021, reported Reuters.
JPMorgan Chase and Co., Barclays, Bank of America (BofA) and other Wall Street players have paid more than $2bn fines in the past two years.
The current move is the latest in a series of enforcement probes targeting off-channel communications such as text and WhatsApp, which violate rules related to communications.
Under the SEC order, Wells Fargo and its affiliates will pay a $125m penalty, BNP Paribas and SG Americas will pay $35m each, while BMO and Mizuho have agreed to pay $25m each.
In addition, Houlihan Lokey Capital has agreed to pay $15m, Moelis & Company and Wedbush Securities $10m and SMBC Nikko Securities America a $9m in penalty.