Failure to supervise

Heed the lessons of the SEC’s latest off-channel communications enforcement action against an adviser and you may well sidestep a similar fate

Senvest failed to implement procedures to monitor whether its employees were following the firm’s policies concerning work-related communications .... At least three senior Senvest officers ...

Violators included “supervisors and senior-level employees”—including some attached to compliance—who used platforms, such as WhatsApp and text messaging, contrary to firm P&Ps

Firms are falling short of the mark in establishing, maintaining, and enforcing a supervisory system tied to OBAs

Violations of Reg BI's care and compliance obligations led to SEC charges against the London-based Laidlaw & Co. (UK)

Although Laidlaw had monitoring procedures to detect potential violations by reps of the quantitative prong of the Care Obligation, Laidlaw did not reasonably maintain and ...

FINRA charged parties failed to evaluate the activities of two reps engaged in OBAs involving investment funds and private placement offerings

Commission staff uncovered Respondents’ misconduct after commencing a risk-based initiative to investigate the use of off-channel and unpreserved communications at broker-dealers

SCUSA contacted the Division of Enforcement upon uncovering off-channel communications potentially related to the business of its broker-dealer

HSI contacted the Division of Enforcement upon uncovering off-channel communications potentially related to the business of its broker-dealer. HSI had already initiated a review of ...