2 US arms of Canadian firms among 11 total firms charged with violating recordkeeping provisions
The US Securities and Exchange Commission (SEC) announced today that 11 firms are being ordered to pay $88 million to settle charges for “widespread recordkeeping failures.” Among the firms fined CIBC World Markets Corp and CIBC Private Wealth Advisors have agreed to a $12 million (USD) penalty. Canaccord Genuity LLC has also agreed to pay a $1.25 million (USD) penalty.
CIBC has also been ordered to pay $30 million (USD) by the Commodity Futures Trading Commission (CFTC)
The SEC charges were for “widespread and longstanding failures by the firms and their personnel to maintain and preserve electronic communications in violation of recordkeeping provisions of the federal securities laws,” according to a press release announcing the settlement.
The release notes that all 11 firms admitted the facts set forth in their respective SEC orders and acknowledged that their conduct violated the recordkeeping provisions. The agreed civil penalties amounted to $88,225,000 in total. The firms have also begun implementing improvements to their compliance policies and procedures.
One of the eleven firms charged, Qatalyst Partners LLP, took “substantial steps to comply, self-reported, [and] remediated,” and was given a no-penalty resolution by the SEC.
“Today’s enforcement actions reflect the range of remedies that parties may face for violating the recordkeeping requirements of the federal securities laws. Widespread and longstanding failures, including where those failures potentially hinder the Commission’s investor protection function by compromising a firm’s response to SEC subpoenas, may result in robust civil penalties,” said Gurbir S. Grewal, Director of the SEC’s Division of Enforcement.
The full list of firms charged by the SEC and their settlement agreements are as follows:
- Stifel, Nicolaus & Company, Inc. agreed to pay a $35 million penalty;
- Invesco Distributors, Inc., together with Invesco Advisers, Inc., agreed to pay a $35 million penalty;
- CIBC World Markets Corp., together with CIBC Private Wealth Advisors, Inc., agreed to pay a $12 million penalty;
- Glazer Capital, LLC agreed to pay a $2 million penalty;
- Intesa Sanpaolo IMI Securities Corp., agreed to pay a $1.5 million penalty;
- Canaccord Genuity LLC agreed to pay a $1.25 million penalty;
- Regions Securities LLC agreed to pay a $750,000 penalty;
- Alpaca Securities LLC agreed to pay a $400,000 penalty;
- Focused Wealth Management, Inc. agreed to pay a $325,000 penalty; and
- Qatalyst Partners LP will not pay a penalty.
CIBC faces additional $30 million fine
The Commodity Futures Trading Commission (CFTC) has also ordered CIBC to pay $30 million (USD) for “recordkeeping an supervision failures for firm-wide use of unapproved communication methods.”
According to the release announcing that penalty, from at least September 2018 to the present day CIBC “failed to stop employees, including those at senior levels, from communicating using unapproved communication methods, including messages sent via personal text.”
