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SEC Imposes Fines on Baird and Interactive Brokers in Ongoing Texting Probe

Posted on October 26th, 2023 at 11:49 AM
SEC Imposes Fines on Baird and Interactive Brokers in Ongoing Texting Probe

From the desk of Jim Eccleston at Eccleston Law 

Several Wall Street firms, including prominent brokerages like Interactive Brokers Group Inc. and Robert W. Baird & Co. Inc., have collectively agreed to pay tens of millions of dollars in penalties to U.S. regulators due to their employees' use of unmonitored communication channels during work.

The Securities and Exchange Commission (SEC) announced that these firms violated regulations mandating the retention of employees' business communications. As a result, the companies have agreed to pay the SEC $79 million in penalties.

According to the SEC, Interactive Brokers and one of its affiliates will pay $35 million, and Baird will pay $15 million. William Blair &Co., Nuveen, Fifth Third Bancorp and Perella Weinberg Partners have also agreed to pay smaller multimillion-dollar fines. Interactive Brokers has also committed to paying $20 million to settle a probe by the CFTC regarding its communication practices.

The SEC's investigation, which initially targeted the use of chat apps by trading desks, has expanded to include all communication tools in the finance sector that fail to maintain proper records. Hedge funds and private equity firms are also under investigation for their use of personal communication apps. AdvisorHub reports that although many firms have agreed to settlements, there is growing resistance within the industry against the increased scrutiny of recordkeeping.

 

Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.

Tags: eccleston, eccleston law, sec

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