The Securities and Exchange Commission fined 26 broker-dealers from Ameriprise Financial to Truist Securities a combined $394 million for widespread recordkeeping and communications failures revolving around brokers and investment advisers improperly communicating with customers away from the firms through text messages, personal e-mails, and other forms of unauthorized off-channel avenues.
The SEC doled out its largest fines to Ameriprise Financial Services, Edward D. Jones & Co., LPL Financial, and Raymond James & Associates, issuing $50 million penalties to each broker-dealer. RBC Capital Markets followed closely behind with a $45 million fine, while BNY Mellon Securities Corp. saw a $40 million penalty, followed by TD Securities USA ($30m), Osaic Services ($18m), Cowen Investment Management ($16.5m), and Piper Sandler & Co. ($14m). Rounding out the fined firms were First Trust Portfolios, Apex Clearing Corp, Truist Securities, Cetera Advisors Network, Great Point Capital, Hilltop Securities, P. Schoenfeld Asset Management, and Haitong International Securities (USA).
Citing a "widespread and long standing failure" at LPL Financial, the SEC charged LPL with failing to maintain or preserve the substantial majority of off-channel communications—which ordinarily refer to broker or investment adviser correspondence with investors conducted via personal e-mail, texting, WhatsApp, or other unapproved method away from the firm. This, in turn, caused the firm to maintain inaccurate books and records, according to the report, which in turn hindered the SEC's ability to regulate and investigate the firm for potential wrongdoing or unsuitable conduct.
The SEC concluded that LPL’s recordkeeping failure thus potentially compromised and delayed enforcement, supervision, and other commission matters, which may have included investigations into illicit activity that placed customers at risk.
If you invested with any broker or investment adviser at Ameriprise Financial, LPL, Raymond James, or another brokerage firm whose communication or business activities conducted away from the firm has proven harmful to your investments or interests through unsuitable recommendations or other misconduct, please call an experienced FINRA arbitration attorney at The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for an investigation and consultation.