Nov 21, 2023

Apartfrom the financial penalties, the firms have agreed to cease and desist fromfuture violations, received censures, and committed to implementingimprovements in their compliance policies and procedures. They will also retainindependent compliance consultants to conduct comprehensive reviews of theirpolicies and procedures related to the retention of electronic communicationson personal devices. The Commodity Futures Trading Commission also announcedsettlements with InteractiveBrokers for related conduct. SEC Highlights Broker-DealersFalling Behind in AML Program Revisions In an earlier report, Finance Magnates noted that the SECissued a warning to broker-dealers , urging them to enhance their anti-moneylaundering (AML) policies and procedures, specifically emphasizing duediligence when opening new customer accounts. The regulator highlightedconcerns about inadequate resources, including staff allocation, devoted to AMLcompliance programs by some broker-dealers. The SEC outlined guidelinesfor broker-dealers, stressing the necessity of implementing and maintaining acomprehensive AML program aligned with the Bank Secrecy Act and itsregulations. Additionally, the regulator noted deficiencies in timely testingof AML controls and updates to AML programs among certain broker-dealers. TheSecurities and Exchange Commission (SEC) has announced charges against fivebroker-dealers, three dually registered broker-dealers and investment advisers,and two affiliated investment advisers for widespread and longstanding failuresto maintain and preserve electronic communications. Off-ChannelCommunications Scandal Thefirms, including Interactive Brokers Corp., Robert W. Baird & Co. Inc.,William Blair & Company LLC, Nuveen Securities LLC, Fifth Third SecuritiesInc., and Perella Weinberg Partners LP, have collectively agreed to pay $79million in penalties. TheSEC's investigations revealed pervasive and longstanding off-channelcommunications at all 10 firms. Employees at these firms communicated throughpersonal text messages about their business activities, violating recordkeepingprovisions of the federal securities laws. Thebroker-dealer and investment adviser firms admitted to their employees sendingand receiving off-channel communications related to recommendations and advicebut failed to maintain or preserve the substantial majority of thesecommunications. Keep Reading Apartfrom the financial penalties, the firms have agreed to cease and desist fromfuture violations, received censures, and committed to implementingimprovements in their compliance policies and procedures. They will also retainindependent compliance consultants to conduct comprehensive reviews of theirpolicies and procedures related to the retention of electronic communicationson personal devices. The Commodity Futures Trading Commission also announcedsettlements with InteractiveBrokers for related conduct. SEC Highlights Broker-DealersFalling Behind in AML Program Revisions In an earlier report, Finance Magnates noted that the SECissued a warning to broker-dealers , urging them to enhance their anti-moneylaundering (AML) policies and procedures, specifically emphasizing duediligence when opening new customer accounts. The regulator highlightedconcerns about inadequate resources, including staff allocation, devoted to AMLcompliance programs by some broker-dealers. The SEC outlined guidelinesfor broker-dealers, stressing the necessity of implementing and maintaining acomprehensive AML program aligned with the Bank Secrecy Act and itsregulations. Additionally, the regulator noted deficiencies in timely testingof AML controls and updates to AML programs among certain broker-dealers. ADVERTISEMENT