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May 19, 2023 at 02:14 PM
You can bet that the SEC will be issuing more sweeps, Gurbir Grewal, director of the Securities and Exchange Commission’s enforcement division, said Wednesday.
“It’s a powerful tool, and we’ll continue to use it wherever we see risk in a broad industry segment,” Gurbir said at the Financial Industry Regulatory Authority’s annual conference in Washington.
He noted the recent off-channel communications sweep as well as previous sweeps and initiatives around Form CRS and 12b-1 fees and share classes.
Sweeps, Grewal said, are “attention grabbing; they sent a message.”
HSBC Securities and Scotia Capital were the most recent firms hit by the SEC for off-channel communications violations. The SEC said there were “widespread and longstanding failures” by both firms and their employees to maintain and preserve electronic messages.
Christopher Kelly, FINRA’s acting head of enforcement, added on the panel with Grewal that FINRA has been bringing cases related to Regulation Best Interest in “three buckets.”
