The recent enforcement actions by the U.S. Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) demonstrate the agencies continued intense focus on off-channel communications, such as WhatsApp and other digital platforms, which have become a growing compliance risk in financial markets.
This month, in a sweeping move the SEC levied nearly $400 million in fines against 26 broker dealers for failing to maintain complete records of business communications, bringing the total fines since 2021 to approximately $2 billion. However, the crackdown is not isolated to the SEC or CFTC; rather, it signals the broader U.S. regulatory agenda aimed at preserving the integrity of financial markets.
Beyond the SEC and CFTC: A Broader Regulatory Crackdown
The issue of off-channel communications extends well beyond the realms of the SEC and CFTC. As highlighted by the Department of Justice (DoJ) and Federal Trade Commission (FTC)  recent guidance, there is a coordinated policy effort across U.S. regulatory bodies to enforce stricter rules around recordkeeping and communication  compliance practices. These rules are essential for integrity of financial markets and the ability of regulators to conduct thorough investigations. The broad regulatory sweep is not just limited to broker-dealers and investment advisers; it is expanding to include other critical financial market participants.
Implications for Asset Managers and Credit Rating Agencies
A Unified Regulatory Approach to Financial Integrity
Preparing for the Future: Proactive Compliance Measures
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