SEC Issues $393 Million in Fines for Off-Channel Messaging Violations

The SEC’s $393 million in off-channel messaging fines highlights regulators’ intensified focus on unauthorized business communications conducted on personal devices and apps. Financial firms are under increased scrutiny for failing to preserve required records, leading to significant penalties. Recent enforcement actions have collectively surpassed $3 billion in fines, reinforcing regulators’ commitment to ensuring that all business-related messages remain verifiable and part of an official record.

If you or someone you know has suffered significant investment losses working with a firm discussed in this article or any other brokerage firm, don’t hesitate to reach out to Meyer Wilson today. Our attorneys are experienced in securities fraud cases and will help to guide you through the process with a free consultation to determine whether your losses are the result of actionable misconduct.

SEC’s Recordkeeping Violations and $392.75 Million Fine

Breakdown of Financial Penalties

The SEC imposed $392.75 million in civil penalties on 26 broker-dealers, investment advisers, and dually registered firms. Each firm was found guilty of conducting business discussions through off-channel communications that were not captured in official firm records. All 26 entities admitted to regulatory breaches and agreed to implement stronger supervisory and archiving practices. In addition to the monetary penalties, firms faced censure for failing to properly supervise their employees.

The penalties for each firm (including affiliated entities) are as follows:

• Ameriprise Financial Services, LLC: $50 million

• Edward D. Jones & Co.: $50 million

• LPL Financial, LLC: $50 million

• Raymond James & Associates, Inc.: $50 million

• RBC Capital Markets, LLC: $45 million

• BNY Mellon Securities Corp. and Pershing, LLC: $40 million

• TD Securities, LLC, TD Private Client Wealth, LLC, and Epoch Investment Partners, Inc.: $30 million

• Osaic Services, Inc. and Osaic Wealth, Inc.: $18 million

• Cowen and Company, LLC and Cowen Investment Management, LLC: $16.5 million

• Piper Sandler & Co.: $14 million

• First Trust Portfolios: $8 million

• Apex Clearing Corp.: $6 million

• Truist Securities, Inc., Truist Investment Services, Inc., and Truist Advisory Services, Inc. (self-reported): $5.5 million

• Cetera Advisor Networks, LLC and Cetera Investment Services, LLC (self-reported): $4.5 million

• Great Point Capital, LLC: $2 million

• Hilltop Securities, Inc. (self-reported): $1.6 million

• P. Schoenfeld Asset Management: $1.25 million

• Haitong International Securities, Inc.: $400,000

Recordkeeping Failures and Federal Law Breaches

Between 2018 and 2021, employees—including senior management—used personal devices for business discussions on platforms like WhatsApp and text messaging. This widespread use of off-channel communications violated federal requirements mandating financial firms to retain business-related messages. Investigators found that missing records hampered their ability to verify compliance or reconstruct trade timelines, raising concerns about potential misconduct.

Since 2022, the SEC has conducted multiple enforcement waves, leading to over $3 billion in fines. The Commodity Futures Trading Commission (CFTC) also launched enforcement actions against The Toronto Dominion Bank, Cowen and Co., and Truist Bank for similar off-channel communication failures. This inter-agency approach shows regulators’ collective effort to enforce compliance across the industry.

How Meyer Wilson Can Help Investors

Regulators are making it clear: off-channel communications that evade oversight are a serious compliance issue. The financial industry is adapting to stricter archiving and monitoring requirements, but investors are still facing the consequences of a wide variety of firms that have not yet caught up with the securities they need.

If you or someone you know has been a victim of losses through a brokerage firm, contact our team at Meyer Wilson today. With over 20 years of experience and $350 million in recovered losses for our clients, we are well-versed in handling cases such as these.

Frequently Asked Questions

What Are Off-Channel Communications?

Business-related messages sent through non-approved platforms—such as personal texts, messaging apps, or private email accounts—that financial firms fail to archive.

Which Firms Were Penalized by the SEC?

Twenty-six broker-dealers, investment advisers, and dually registered firms faced combined penalties of $392.75 million for failing to properly document business communications.

How Are Recordkeeping Failures Defined?

These failures occur when firms do not systematically archive business-related communications, preventing regulators from verifying compliance.