(Bloomberg) -- A fresh slate of Wall Street firms agreed to collectively pay tens of millions of dollars to US regulators over their employees' use of unmonitored communication channels on the job.
The Securities and Exchange Commission said on Friday that the firms, including Interactive Brokers and Robert W. Baird & Co. Inc., had broken rules that say employees' business communications had to be saved. The penalties add to to the more than $2.5 billion that almost two dozen other banks have agreed to pay the SEC and the Commodity Futures Trading Commission to settle similar investigations into use of text messages on personal phones and of WhatsApp.
Financial firms are required to monitor and save communications involving their business to head off improper conduct. Regulators say it is significantly harder to investigate wrongdoing when firms fail to save records. Gurbir Grewal, the SEC's enforcement director, made companies' recordkeeping lapses a priority since he took office in 2021.
Interactive Brokers and an affiliate will pay $35 million, Baird will pay $15 million, the SEC said. William Blair, Nuveen, Fifth Third and Perella Weinberg also agreed to pay multimillion-dollar fines.
What began as scrutiny of trading desks' use of chat apps has expanded to include all of finance's use of any communication tool that doesn't save records appropriately. Hedge funds and private equity firms are also under investigation for their use of personal communication apps.
Though dozens of firms have agreed to settle, Citadel is preparing to push back if the SEC proceeds with an enforcement action against the hedge fund giant, Bloomberg News has reported.
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