SEC Resolution Spotlights Implications of Self-Reporting and Violations of Firm Communications Policies

The SEC announced charges against another set of broker-dealers and investment advisors relating to the failure to preserve electronic communications on mobile devices. Of particular interest is an order censuring but declining to impose a penalty on one broker-dealer. The order acknowledges measures implemented by the firm to support compliance with recordkeeping requirements, including being an early adopter of compliant text messaging technology, but included a finding that the firm failed to implement sufficient monitoring to ensure that its policies were "always" being followed. The order led to a critical statement from Commissioners Hester M. Pierce and Mark T. Uyeda. This memorandum summarizes the resolution and potential implications for future SEC enforcement activity relating to off-platform communications.

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