SEC Charges 12 Firms for Recordkeeping Failures and Issues More Than $63 million in penalties.
Source(s):
- SEC Order - Blackstone Alternative Credit Advisors LP, Blackstone Management Paโฆ
- SEC Order - TPG Capital Advisors, LLC
- SEC Order - Kohlberg Kravis Roberts & Co. L.P.
- SEC Order - Apollo Capital Management, L.P.
- SEC Order - Carlyle Investment Management L.L.C., Carlyle Global Credit Investmโฆ
- SEC Order - PJT Partners LP
- SEC Order - Santander US Capital Markets LLC
- SEC Order - Charles Schwab & Co., Inc.
The Securities and Exchange Commission (SEC) announced charges against nine investment advisers and three broker-dealers for failing to maintain and preserve electronic communications, violating federal securities laws. The firms collectively agreed to pay $63.1 million in civil penalties and admitted to the SECโs findings, which included the use of unapproved off-channel communication methods by personnel at all levels, from supervisors to senior managers. One firm, PJT Partners LP, self-reported its violations and received a reduced penalty of $600,000 compared to other firms, such as Blackstone and KKR, which were fined $12 million and $11 million, respectively.
- Blackstone Alternative Credit Advisors LP, together with Blackstone Management Partners L.L.C. and Blackstone Real Estate Advisors L.P., agreed to pay a combined $12 million penalty;
- Kohlberg Kravis Roberts & Co. L.P. agreed to pay a $11 million penalty;
- Charles Schwab & Co., Inc. agreed to pay a $10 million penalty;
- Apollo Capital Management L.P. agreed to pay a $8.5 million penalty;
- Carlyle Investment Management L.L.C., together with Carlyle Global Credit Investment Management L.L.C., and AlpInvest Partners B.V., agreed to pay a combined $8.5 million penalty;
- TPG Capital Advisors LLC agreed to pay an $8.5 million penalty;
- Santander US Capital Markets LLC agreed to pay a $4 million penalty;
- PJT Partners LP, which self-reported, agreed to pay a $600,000 penalty.
Acting SEC Enforcement Director Sanjay Wadhwa highlighted that these failures undermine not only document production but also the broader accountability of market participants. In addition to financial penalties, the firms were ordered to cease and desist from further violations, censured, and required to enhance their compliance policies.
TLDRS:
- The SEC charged nine investment advisers and three broker-dealers for failing to maintain electronic communications, violating federal securities laws.
- Firms collectively agreed to pay $63.1 million in penalties, with Blackstone fined $12 million, KKR $11 million, and Charles Schwab $10 million. PJT Partners, which self-reported, received a reduced penalty of $600,000.
- The charges stemmed from the use of unapproved off-channel communications by personnel at all levels, including supervisors and senior managers.
- The firms were censured, ordered to cease and desist from further violations, and required to improve compliance policies.
