The SEC announced charges Sept. 29 against 10 firms for violating record-keeping rules, stating the companies failed to maintain and preserve electronic communications.
All 10 firms had "pervasive and longstanding off-channel communications," the majority of which were not maintained or preserved, the SEC said in a news release. The failure to maintain and preserve required records was a violation of federal securities laws, the SEC said.
The companies charged consist of five broker-dealers, three dually registered broker-dealers and investment advisers, and two affiliated investment advisers — including Interactive Brokers, Robert W. Baird & Co., William Blair & Co. and its affiliate William Blair Investment Management, Fifth Third Securities and Nuveen Securities.
Perella Weinberg Partners, together with its energy business Tudor, Pickering, Holt & Co. Securities and Perella Weinberg Partners Capital Management, self-reported after an internal investigation.
"There are real benefits to self-reporting, remediating and cooperating," said Gurbir S. Grewal, director of the SEC's enforcement division, in the news release.
The firms agreed to pay a total of $79 million in penalties, cease and desist from future violations of their record-keeping requirements and were censured. The companies also agreed to hire independent compliance consultants to conduct reviews of their electronic communications on personal devices and their frameworks for dealing with non-compliance.
"While we are obviously disappointed with the findings, we have made enhancements to our compliance procedures in recent years related to this issue, and we are pleased to have resolved the matter," a Robert W. Baird spokesperson said in an email.
"We are pleased to have resolved this matter," a spokesperson for Nuveen said in an email.
Interactive Brokers, William Blair, Fifth Third Securities and Perella Weinberg Partners declined to comment.
