The U.S. Securities and Exchange Commission (SEC) today announced charges against 10 brokerage firms, as well as a dual-registered broker and investment advisory firm, for their long-standing and widespread failure to maintain and preserve electronic communication channels.。

These companies acknowledged the facts stated by their respective SEC。They admitted their actions violated the record-keeping provisions of the federal securities laws, agreeing to pay 2.$8.9 billion in consolidated fines and has begun to improve compliance policies and procedures to address these violations.。

• Wells Fargo Securities LLC, Wells Fargo Clearing Services LLC, and Wells Fargo Advisors Financial Network LLC agree to pay 1.$2.5 billion fine
  BNP Paribas Securities Corp.) and SG Americas Securities, LLC have each agreed to pay $35 million in fines
  BMO Capital Markets Corp.and Mizuho Securities USA LLC have each agreed to pay $25 million in fines
  Houlihan Lokey Capital, Inc.has agreed to pay a $15 million fine
  Moelis & Company LLC and Wedbush Securities Inc.both agreed to pay $10 million in fines
  SMBC Nikko Securities America, Inc.has agreed to pay a $9 million fine

The SEC's investigation found widespread and long-standing "out-of-channel" communication at all 11 companies.。The companies acknowledge that since at least 2019, their employees have often communicated about their employer's business through various messaging platforms on their personal devices, including iMessage, WhatsApp and Signal.。These companies did not maintain or retain the vast majority of non-channel communications, in violation of federal securities laws.。

By failing to maintain and retain the required records, certain companies may be stripped of the Commission's non-channel communications in various SEC investigations involving multiple levels of employees, including supervisors and senior management.。

Each broker is accused of violating certain record-keeping provisions of the Securities Exchange Act of 1934 and failing to exercise reasonable supervision to prevent and detect these violations.。Wedbush Securities Inc.is a dual-registered broker-dealer and investment adviser and is also accused of violating certain record-keeping provisions of the Investment Advisers Act 1940 and of failing to exercise reasonable supervision to prevent and detect these violations.。

In addition to the large financial penalties, each company was ordered to cease and desist from future violations of relevant record-keeping regulations and was reprimanded。The companies also agreed to engage independent compliance consultants to, inter alia, conduct a comprehensive review of their policies and procedures regarding the retention of electronic communications on personal devices and their respective frameworks to address employee non-compliance with those policies and procedures.。

In addition, the Commodity Futures Trading Commission (CFTC) announced its cooperation with Wells Fargo Bank NA, Wells Fargo Securities, LLC, BNP Paribas Securities Corp.., BNP Paribas S.A., SG Americas Securities, LLC, Société Générale S.A., Bank of Montreal and Wedbush Securities reached a settlement to take the next step。