A dozen financial firms, including industry leaders Blackstone Inc. BX and KKR & Co Inc KKR, have reached a settlement with the Securities and Exchange Commission (SEC) over recordkeeping violations. The settlement, totaling $63.1 million, addresses allegations of improper communication practices.
What Happened: The SEC accused these firms of utilizing unauthorized communication methods, referred to as off-channel communications, to exchange messages that were required to be preserved under securities laws. These recordkeeping lapses reportedly involved personnel at various levels, including supervisors and senior managers, The Wall Street Journal reported on Tuesday.
As part of the settlement, Blackstone will pay $12 million, while KKR will contribute $11 million.
A spokesperson for Blackstone expressed satisfaction with the resolution, stating, “We have already taken significant steps to further strengthen our electronic communications procedures—including before the start of this inquiry—and are committed to the highest standard of compliance.”
Why It Matters: This settlement follows a similar action by the SEC last year, where major rating agencies, including Moody’s Corp., S&P Global, and Fitch Ratings, were fined over $49 million for comparable recordkeeping failures. The SEC’s actions underscore its ongoing efforts to enforce compliance with federal securities laws, particularly concerning the preservation of electronic communications.
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