The Securities and Exchange Commission (SEC) has assessed a combined penalty of $81 million to sixteen financial services firms for transgressions involving electronic communications. Each penalized firm has agreed to the penalties.
The SEC Division of Enforcement said there have been “pervasive and longstanding uses of unapproved communication methods.”
Last year, in August, the SEC penalized a group of banks $549 million for using WhatsApp and other messaging services while not maintaining records.
The firms paying penalties included five broker-dealers, seven dually registered broker-dealers and investment advisers, and four affiliated investment advisers. The SEC said employees spanned the spectrum from rank and file to supervisors and executives.
The firms are as follows:
- Northwestern Mutual Investment Services LLC (NMIS), together with Northwestern Mutual Investment Management Co. LLC (NMIM) and Mason Street Advisors LLC (Mason Street) (collectively, Northwestern Mutual), agreed to pay a $16.5 million penalty;
- Guggenheim Securities LLC (Guggenheim Securities), together with Guggenheim Partners Investment Management LLC (GPIM) (collectively, Guggenheim), agreed to pay a $15 million penalty;
- Oppenheimer & Co. Inc. (Oppenheimer) agreed to pay a $12 million penalty;
- Cambridge Investment Research Inc. (CIR), together with Cambridge Investment Research Advisors Inc. (CIRA) (collectively, Cambridge), agreed to pay a $10 million penalty;
- Key Investment Services LLC (KIS), together with KeyBanc Capital Markets Inc. (KBCM) (collectively, Key), agreed to pay a $10 million penalty;
- Lincoln Financial Advisors Corporation, together with Lincoln Financial Securities Corporation (collectively, Lincoln), agreed to pay an $8.5 million penalty;
- U.S. Bancorp Investments Inc. (U.S. Bancorp) agreed to pay an $8 million penalty; and
- The Huntington Investment Company (HIC), together with Huntington Securities Inc. (HSI) and Capstone Capital Markets LLC (Capstone) (collectively, Huntington), which self-reported, agreed to pay a $1.25 million penalty.
Each firm was ordered to cease and desist from future violations and they agreed to retain independent compliance consultants to conduct reviews of their policies and procedures relating to the retention of electronic communications on personal devices.