SEC Fines Wall Street Firms $63 Million for Recordkeeping Violations

The U.S. Securities and Exchange Commission (SEC) has fined a dozen Wall Street firms a total of $63.1 million for using unauthorized communication methods that violated federal recordkeeping laws.

Employees, including managers, were found to have relied on unapproved platforms to exchange work-related messages, and firms failed to enforce adequate oversight to prevent such practices.

Prominent names such as Charles Schwab, Santander, and Blackstone are among the penalized firms. The fines include $12 million for Blackstone, $11 million for Kohlberg Kravis Roberts & Co., $10 million for Charles Schwab, and $8.5 million each for Apollo Capital Management, Carlyle Investment Management, and TPG Capital Advisors. Santander was fined $4 million, while PJT Partners, which self-reported, paid $600,000.

In addition to financial penalties, the SEC has issued censures and mandated that these firms overhaul their compliance protocols to address deficiencies. Acting SEC Enforcement Director Sanjay Wadhwa stressed that failures in recordkeeping compromise market transparency and integrity, emphasizing the importance of adherence to these regulations.

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The affected firms have agreed to enhance their internal procedures to prevent future violations, aiming to restore compliance and trust in their operations.

Kosta Gushterov