SEC vs Banks, a $79M match sponsored by crypto

The Securities and Exchange Commission (SEC) persists in its relentless battle against the crypto sector. In its latest stunt, it has singled out ten Wall Street firms, accusing them of engaging in “off-channel communications”. This regulatory offensive triggered a series of sanctions, imposing fines totaling $79 million.

SEC punishes ten banks and brokers for “Off-Channel Communications”

The SEC never divert his face when it comes to the crypto sector. This time, it focused on communication practices within the crypto-currency ecosystem, targeting banks, broker-dealers and asset investment advisors.

This Friday, September 29, the Wall Street firms targeted, including Perella Weinberg PartnersInteractive Brokers, Robert W. Baird & Co, William Blair & Company, Nuveen Securities and Fifth Third Securities have accepted to collectively pay a record fine of $79 million to the SEC. This action follows allegations of “off-channel communications”. These SEC charges focus on the use of email platforms, such as WhatsApp, by employees of these companies to discuss business matters, including investment advice.

From $2.5 to $35 million in fines in the USA

Penalties vary considerably from one organization to another. Perella Weinberg and two of its affiliates who reported their own violations obtained the lightest sanction, amounting to 2.5 million dollars (USD) while Interactive Brokers Corp. and an affiliated company were awarded the highest fines, reaching 35 M$Robert W Baird & Co agreed to pay 15 M$. Last but not least, William Blair & Company and an affiliated company paid 10 M$.

The companies acknowledged the accusations made by the SEC and have formally admitted to violating US securities laws.

These sanctions committed the companies to taking firm action to prevent future document retention violations. At the same time, they have been forced to collaborate with independent compliance experts. In the end, many players are learning as they go along how to comply with crypto-related regulatory constraints, and are implementing suitable processes.
Will this latest SEC action set an example for other players in the ecosystem?