WFC - SEC charges 11 more Wall Street firms in messaging probe

2023-08-08 10:26:49 ET

On Tuesday, the Securities and Exchange Commission continued to bring charges in its wide-sweeping investigation into Wall Street firms' failures to maintain and preserve their employees' electronic communications on personal devices through such platforms as Whatsapp and iMessage.

In the latest round, 11 firms agreed to pay combined penalties of $289M for the failures and have started putting in place improvements to their compliance policies and procedures.

Companies in the settlement agreed to pay the following penalties: Wells Fargo Securities ( NYSE: WFC ), with Wells Fargo Clearing Services and Wells Fargo Advisors Financial Network, agreed to pay $125M;

BNP Paribas Securities ( OTCQX:BNPQF ) ( OTCQX:BNPQY ) and SG Americas Securities ( OTCPK:SCGLY ) ( OTCPK:SCGLF ) each agreed to pay $35M;

BMO Capital Markets ( NYSE: BMO ) and Mizuho Securities USA ( NYSE: MFG ) ( OTCPK:MZHOF ) each agreed to pay $25M;

Houlihan Lokey Capital ( NYSE: HLI ) agreed to pay $15M;

Moelis & Company ( NYSE: MC ) and Wedbush Securities each agreed to pay $10M; and

SMBC Nikko Securities America ( NYSE: SMFG ) agreed to pay $9M.

To date, the SEC has brought 30 enforcement actions and ordered more than $1.5B in penalties through the investigation.

"Today’s actions stem from our continuing sweep to ensure that regulated entities, including broker-dealers and investment advisers, comply with their recordkeeping requirements, which are essential for us to monitor and enforce compliance with the federal securities laws," said Sanjay Wadhwa, deputy director of the SEC's Enforcement Division.

Under the settlement, the firms admitted that from at least 2019, their employees often communicated through their personal devices, including iMessage, WhatsApp, and Signal, about the business of their employers. The firms did not maintain or preserve the substantial majority of these off-channel communications, in violation of the federal securities laws, the SEC alleged.

Separately, the Commodity Futures Trading Commission announced settlements with Wells Fargo Bank NA ( WFC ), Wells Fargo Securities, BNP Paribas Securities ( OTCQX:BNPQY ), SG American Securities, Société Générale S.A., Bank of Montreal ( BMO ), and Wedbush Securities for related conduct.

More on SEC's Probe into Firms' Messaging:

• Societe Generale latest bank drawn into SEC's messaging investigation
• HSBC, Scotia Capital charged by SEC
• Sixteen Wall Street firms agree to pay $1.1B to settle SEC's texting/email probe

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