Media Coverage
Source: Financial Times
Media Coverage
Press Contacts: Erik Cummins, Matt Hyams, Taina Rosa, Olivia Thomas
08.21.24
As the Securities and Exchange Commission (SEC) continues its ongoing investigation regarding so-called off-channel communications, broker-dealers, investment advisers and other regulated entities are bracing for potential monetary penalties and other sanctions.
The SEC has already imposed more than $2 billion in penalties since this sweep began in 2021 and recently levied an additional $400 million from 26 Wall Street firms in the latest round. According to coverage by Financial Times, recent regulatory filings revealed that many firms have set aside tens of millions of dollars to cover expected penalties as the SEC’s sweep presumably continues into 2025.
Corporate Investigations & White Collar Defense partner David Oliwenstein said that the SEC’s off-channel communications sweep is part of a broader trend in which the SEC is “pursuing creative theories of enforcement” under the leadership of chair Gary Gensler.
Oliwenstein, who formerly served with the SEC’s Division of Enforcement, added: “There’s obviously a statutory hook for it, but it’s not an area that’s been pursued historically.”
“I think the SEC staff believe they have a lot of leverage here,” he concluded.
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