This item is part of Stockwatch's value added news feed and is only available to Stockwatch subscribers.

Here is a sample of this item:

by Mike Caswell

The U.S. Securities and Exchange Commission has imposed fines totalling $88-million against 11 firms, including CIBC World Markets Corp. and Canaccord Genuity LLC, for widespread recordkeeping failures relating to internal messaging. (All figures are in U.S. dollars.) The SEC says that employees at the firms used off-channel communications methods, or those that are not available for investigators to pry into at a later date. The individual violators included senior managers, the SEC claims.

The penalties for the firms are contained in administrative orders that the SEC released on Tuesday, Sept. 24. The SEC has ordered CIBC to pay $12-million and Canaccord to pay $1.25-million. The firms must also implement programs designed to ensure future compliance. Tuesday's orders represent negotiated settlements, with Canaccord's lighter fine reflecting the fact that it self-reported the violations.

The orders stem from violations of rules imposed on brokerages and other financial firms that require them to keep copies of all business-related communications for three years or, in the case of investment advice, for five years. The communications include sales scripts, phone call recordings and any messages done through text. As the SEC sees things, these records "are an integral part of the investor protection function of the Commission," allowing the SEC and other regulators to monitor for fraud and other violations.

The remainder is available to Stockwatch subscribers.
Sign-up for a FREE 30-day Stockwatch subscription and SEE NO ADS