The SEC says both firms admitted its employees “often communicated off-channel” about securities business matters on personal devices and via messaging platforms such as WhatsApp, with neither firm maintaining a record of the “substantial majority” of those conversations.
HSBC and Scotia Capital have acknowledged the SEC’s action and agreed to pay penalties of $15 million and $7.5 million respectively. The SEC adds both firms self-reported the violations after gathering communications from the personal devices of a sample of their employees.
“Both HSBC and Scotia Capital self-reported and self-remediated their recordkeeping violations, and the reduced penalties in these cases reflect their efforts and cooperation,” says Gurbir Grewal, director of the SEC’s division of enforcement.
