United States SEC Fines 10 Firms $79 Million for Using Text Messaging Platforms Including Whatsapp & Not Maintaining Records of Communications, 10 Firms Fined Include Nuveen Securities, William Blair, Interactive Brokers, Robert W. Baird & Co, Fifth Third Securities, Perella Weinberg Partners, Perella Weinberg Capital, Tudor, Pickering, Holt & Co. Securities
6th October 2023 | Hong Kong
The United States Securities & Exchange Commission (SEC) has fined 10 firms $79 million for using text messaging platforms including Whatsapp and not maintaining records of communications, with the 10 firms fined include Nuveen Securities, William Blair, Interactive Brokers, Robert W. Baird & Co, Fifth Third Securities, Perella Weinberg Partners, Perella Weinberg Capital, Tudor, Pickering, Holt & Co. Securities. United States SEC: “The SEC’s investigations uncovered pervasive and longstanding off-channel communications at all 10 firms. As described in the SEC’s orders, the broker-dealer firms admitted that, from at least 2019, their employees communicated through personal text messages about the business of their employers, and the investment adviser firms admitted that their employees sent and received off-channel communications related to recommendations made or proposed to be made and advice given or proposed to be given. The firms did not maintain or preserve the substantial majority of these off-channel communications, in violation of the federal securities laws. By failing to maintain and preserve required records, certain of the firms likely deprived the SEC of these off-channel communications in various SEC investigations. The failures involved employees at multiple levels of authority, including supervisors and senior managers.” More info below:
“ United States SEC Fines 10 Firms $79 Million for Using Text Messaging Platforms Including Whatsapp & Not Maintaining Records of Communications, 10 Firms Fined Include Nuveen Securities, William Blair, Interactive Brokers, Robert W. Baird & Co, Fifth Third Securities, Perella Weinberg Partners, Perella Weinberg Capital, Tudor, Pickering, Holt & Co. Securities “
Gurbir S. Grewal, Director of the SEC’s Division of Enforcement: “One of the orders included in today’s announced actions is not like the others. There are real benefits to self-reporting, remediating and cooperating.”
- Interactive Brokers Corp. and affiliate Interactive Brokers LLC (together, Interactive Brokers) agreed to pay a $35 million penalty;
- Robert W. Baird & Co. Inc. agreed to pay a $15 million penalty;
- William Blair & Company LLC and affiliate William Blair Investment Management LLC (WBIM) agreed to pay a $10 million penalty;
- Nuveen Securities LLC agreed to pay an $8.5 million penalty;
- Fifth Third Securities Inc. agreed to pay an $8 million penalty; and
- Perella Weinberg Partners LP (Perella Weinberg), together with Tudor, Pickering, Holt & Co. Securities LLC (TPH) and Perella Weinberg Partners Capital Management LP (Perella Weinberg Capital), which self-reported, agreed to pay a $2.5 million penalty.
United States SEC Fines 10 Firms $79 Million for Using Text Messaging Platforms Including Whatsapp & Not Maintaining Records of Communications
29th September 2023 – The Securities and Exchange Commission today announced charges against five broker-dealers, three dually registered broker-dealers and investment advisers, and two affiliated investment advisers for widespread and longstanding failures to maintain and preserve electronic communications. The firms admitted the facts set forth in their respective SEC orders and acknowledged that their conduct violated recordkeeping provisions of the federal securities laws. The firms agreed to pay combined penalties of $79 million as outlined below and have begun implementing improvements to their compliance policies and procedures to address these violations.
- Interactive Brokers Corp. and affiliate Interactive Brokers LLC (together, Interactive Brokers) agreed to pay a $35 million penalty;
- Robert W. Baird & Co. Inc. agreed to pay a $15 million penalty;
- William Blair & Company LLC and affiliate William Blair Investment Management LLC (WBIM) agreed to pay a $10 million penalty;
- Nuveen Securities LLC agreed to pay an $8.5 million penalty;
- Fifth Third Securities Inc. agreed to pay an $8 million penalty; and
- Perella Weinberg Partners LP (Perella Weinberg), together with Tudor, Pickering, Holt & Co. Securities LLC (TPH) and Perella Weinberg Partners Capital Management LP (Perella Weinberg Capital), which self-reported, agreed to pay a $2.5 million penalty.
The SEC’s investigations uncovered pervasive and longstanding off-channel communications at all 10 firms. As described in the SEC’s orders, the broker-dealer firms admitted that, from at least 2019, their employees communicated through personal text messages about the business of their employers, and the investment adviser firms admitted that their employees sent and received off-channel communications related to recommendations made or proposed to be made and advice given or proposed to be given. The firms did not maintain or preserve the substantial majority of these off-channel communications, in violation of the federal securities laws. By failing to maintain and preserve required records, certain of the firms likely deprived the SEC of these off-channel communications in various SEC investigations. The failures involved employees at multiple levels of authority, including supervisors and senior managers.
Interactive Brokers, Baird, William Blair, Nuveen, Fifth Third, Perella Weinberg, and TPH were each charged with violating certain recordkeeping provisions of the Securities Exchange Act of 1934 and with failing to reasonably supervise with a view to preventing and detecting those violations. Baird, William Blair, WBIM, Fifth Third, and Perella Weinberg Capital were each charged with violating certain recordkeeping provisions of the Investment Advisers Act of 1940 and with failing to reasonably supervise with a view to preventing and detecting those violations. In addition to the significant financial penalties, each of the firms was ordered to cease and desist from future violations of the relevant recordkeeping provisions and was censured. The firms also agreed to retain independent compliance consultants to, among other things, conduct comprehensive reviews of their policies and procedures relating to the retention of electronic communications found on personal devices and their respective frameworks for addressing non-compliance by their employees with those policies and procedures.
Separately, the Commodity Futures Trading Commission announced settlements with Interactive Brokers for related conduct.
The SEC’s investigations into Interactive Brokers, Perella Weinberg, TPH, and Perella Weinberg Capital were conducted by Laurel S. Fensterstock, Karolina Klyuchnikova, Austin Thompson, and Alison R. Levine and supervised by Thomas P. Smith Jr. of the New York Regional Office. The SEC’s investigations into Baird, William Blair, WBIM, Nuveen, and Fifth Third were conducted by Som P. Dalal, Ruta G. Dudenas, Amy S. Cotter, and Anne C. McKinley and supervised by Paul A. Montoya and Kathryn A. Pyszka of the Chicago Regional Office.
Sign Up / Register
Caproasia Users
- Manage $20 million to $3 billion of assets
- Invest $3 million to $300 million
- Advise institutions, billionaires, UHNWs & HNWs
Caproasia Platforms | 11,000 Investors & Advisors
- Caproasia.com
- Caproasia Access
- Caproasia Events
- The Financial Centre | Find Services
- Membership
- Family Office Circle
- Professional Investor Circle
- Investor Relations Network
Monthly Roundtable & Networking
Family Office Programs
The 2024 Investment Day
- March 2024 - Hong Kong
- March 2024 - Singapore
- July 2024 - Hong Kong
- July 2024 - Singapore
- Sept 2024 - Hong Kong
- Sept 2024 - Singapore
- Oct 2024 - Hong Kong
- Nov 2024 - Singapore
- Visit: The Investment Day | Register: Click here
Caproasia Summits
- The Institutional Investor Summit
- The Investment / Alternatives Summit
- The Private Wealth Summit
- The Family Office Summit
- The CEO & Entrepreneur Summit
- The Capital Markets Summit
- The ESG / Sustainable Investment Summit
