The US Securities and Exchange Commission (SEC) announced settlements on Monday with 12 investment advisers and broker-dealers, including affiliates of Blackstone Inc., KKR & Co., Apollo Global Management Inc., and Charles Schwab Corp., for failing to monitor employees’ use of unauthorized communication platforms. The firms will collectively pay over $63 million in fines.
The SEC’s investigation revealed widespread lapses in record-keeping, involving personnel at all levels, including supervisors and senior managers. These violations stemmed from unmonitored business communications on texts and messaging apps, which employers are required to archive.
Among the largest fines, Blackstone affiliates agreed to pay $12 million, KKR $11 million, Schwab $10 million, and Apollo $8.5 million. Smaller penalties were imposed on entities like Carlyle Group Inc., TPG Inc., Banco Santander SA, and PJT Partners, which received the lowest fine of $600,000 for self-reporting its lapses.
“Such failures affect the transparency and integrity of the markets,” said Sanjay Wadhwa, the SEC’s acting enforcement director.
Blackstone and Schwab emphasized their commitment to compliance, with Blackstone noting preemptive steps to improve electronic communication policies. Santander’s US affiliate affirmed its cooperation and enhancements to compliance practices.
This enforcement marks an ongoing SEC crackdown on Wall Street’s use of unauthorized communication tools, underscoring its commitment to market integrity.