Wall Street Firms Fined $470 Million for Record-Keeping Violations

Several Wall Street firms, including major players like Bank of New York Mellon and Truist, have collectively agreed to pay $470 million in fines following an investigation by U.S. regulators.

The penalties were imposed by the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) after it was found that the companies violated record-keeping regulations.

The SEC revealed that these firms used unauthorized communication methods, which is a breach of federal securities regulations. This lapse in record-keeping compliance hindered the SEC’s ability to access crucial communications during their investigations.

Bank of New York Mellon will pay $40 million in fines, while Truist is set to pay $8 million, divided between the SEC and the CFTC. Other firms, such as Ameriprise Financial Services, Edward D. Jones & Co., LPL Financial, and Raymond James & Associates, have each agreed to pay $50 million to settle with the SEC. Toronto Dominion (TD) Bank has agreed to pay $75 million to the CFTC, with its subsidiary, Cowen and Company, also settling for $3 million in fines.

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Additional financial firms involved in these settlements include RBC Capital Markets, Osaic Services, Piper Sandler & Co, First Trust Portfolios, Apex Clearing Corporation, Cetera Advisor Networks, and others. These penalties are related to their failure to comply with record-keeping standards.

The SEC acknowledged that some companies took proactive steps by self-reporting their violations, resulting in lower fines. Gurbir S. Grewal, the SEC’s Director of Enforcement, emphasized the importance of maintaining proper records to protect investors and ensure market integrity. He also pointed out that firms that cooperated early in the investigation reaped the benefits of reduced penalties.

Alexander Stefanov