Wall Street Firms to Pay $100 Million for Record-Keeping Violations, Reports Reuters

More Wall Street firms have agreed to pay a total of $100 million to settle allegations from U.S. regulators regarding violations of regulations tied to the use of personal devices, text messaging, and apps like WhatsApp for business communications.

The firms involved, including Stifel, Nicolaus & Company, Invesco Distributors, and the Canadian Imperial Bank of Commerce, did not adhere to record-keeping requirements for broker-dealers and other registered entities, according to statements from the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).

These settlements are part of an ongoing initiative by the SEC and CFTC that began in 2021, targeting banks and financial institutions that have not sufficiently managed employees’ use of personal devices and communication apps.

Specifically, the Canadian Imperial Bank of Commerce has agreed to pay $30 million to the CFTC, while its other divisions—CIBC World Markets and CIBC Private Wealth Advisors—will pay an additional $12 million to the SEC. The Canadian bank confirmed its cooperation with regulators and indicated that it has taken immediate steps to address the issues identified.

The SEC’s enforcement director, Gurbir Grewal, highlighted that widespread and persistent failures, especially those complicating the Commission’s investor protection efforts, can lead to substantial civil penalties. Notably, one firm, Qatalyst Partners LP, will not incur penalties due to its significant efforts in reporting and resolving the issue.

Other firms participating in the penalties include:

– Stifel, Nicolaus & Company: $35 million to SEC
– Invesco units: $35 million to SEC
– Glazer Capital, LLC: $2 million to SEC
– Intesa Sanpaolo IMI Securities Corp.: $1.5 million to SEC
– Canaccord Genuity LLC: $1.25 million to SEC
– Regions Securities LLC: $750,000 to SEC
– Alpaca Securities LLC: $400,000 to SEC
– Focused Wealth Management, Inc.: $325,000 penalty