SEC Uncovers
From the desk of Jim Eccleston at ÍøÆØ³Ô¹Ï
Wall Street regulators recently imposed hundreds of millions of dollars in penalties on broker-dealers. The penalties resulted from their failure to detect executives and traders using unofficial communication platforms such as WhatsApp.
As reported by InvestmentNews, eleven firms agreed to pay $289 million to settle the matter with the Securities and Exchange Commission (SEC). However, ÍøÆØ³Ô¹Ïdbush Securities Inc. had its wealth management operations cited directly in the settlement, with the SEC claiming “pervasive off-channel communications at all seniority levels of ÍøÆØ³Ô¹Ïdbush's broker-dealer and investment advisor.”
According to the SEC, from at least January 2019, ÍøÆØ³Ô¹Ïdbush broker-dealer personnel sent and received off-channel messages that concerned the broker-dealer's business. During this period, ÍøÆØ³Ô¹Ïdbush investment advisor personnel sent and received off-channel messages related to, among other things, providing and recommending investment advice to clients. Additionally, from November 2021 to September 2022, according to the SEC, an executive vice president in ÍøÆØ³Ô¹Ïdbush's wealth management division exchanged numerous off-channel business-related messages with at least nine ÍøÆØ³Ô¹Ïdbush colleagues, personnel at other financial services firms, and market participants. ÍøÆØ³Ô¹Ïdbush agreed to pay a penalty of $10 million.
ÍøÆØ³Ô¹Ï LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.
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