Latest Wave of SEC Off-Channel Communications Enforcement Actions: Five Takeaways
On September 29, 2023 — the last business day of its fiscal year — the U.S. Securities and Exchange Commission (SEC) issued the latest in a series of actions charging 10 firms with recordkeeping failures in connection with employees’ use of unapproved applications on personal devices to engage in communications relating to the firms’ business (known as “off-channel communications”).1 The firms charged included broker-dealers, investment advisers, and dually registered broker-dealers and investment advisers as well as one family of firms that self-reported conduct to the SEC. To date, the SEC has charged over 40 registrants and leveled over $1.6 billion in penalties as part of its off-channel communications matters. Other regulators, including the Commodity Futures Trading Commission (CFTC), have brought similar cases.
SEC’s Cybersecurity Disclosure Rules Are Here. Is Your Company Ready to Comply?
Companies are facing more attacks on their information systems. And, as their cyber risk skyrockets, the SEC has stepped in with new regulations, telling businesses what to disclose about these incidents — and requiring detailed disclosures on cyber risk management more broadly. With the deadline for compliance fast approaching, businesses are scrambling to mitigate their legal risk and comply with regulations that some say may be an overreach.
