The SEC's "crackdown on off-channel communications" refers to a recent enforcement campaign by the Securities and Exchange Commission targeting financial firms that fail to properly record and preserve business-related communications sent through personal devices or unapproved channels like text messages, WhatsApp, or iMessages, essentially meaning they are not captured by the firm's standard record keeping systems; this is considered a violation of securities regulations and has resulted in significant fines against multiple Wall Street firms.
The Securities and Exchange Commission announced Monday it had reached $63.1 million in total settlements with eight firms and their subsidiaries over alleged failures to track and record digital messages sent by their employees. The companies named include the investment management giants Blackstone, KKR, Apollo, Carlyle and the wealth management mainstay Charles Schwab.
The firms were all accused of not doing enough to monitor their employees' use of unapproved communications methods to send messages related to business matters. The SEC said the record keeping violations at some firms occurred at the supervisor and senior management levels.
"In order to effectively carry out their oversight responsibilities, the commission's examinations and enforcement divisions must, and indeed do, rely heavily on registrants complying with the books and records requirements of the federal securities laws," Sanjay Wadhwa, the acting director of the SEC's division of enforcement, said in a statement.
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