The Securities and Exchange Commission has denied two more requests to modify settlement terms related to off-channel communications violations.
After agreeing to their settlements, Perella Weinberg Partners and Kroll Bond Rating Agency now argue that the SEC should “equalize” certain undertakings contained in the firms' agreements with those contained in more recent Commission settlements as well as to stay the effectiveness of the firms' undertakings pending SEC consideration of their motions.
The agency's Division of Enforcement opposed the firms’ motions Thursday.
Perella Weinberg Partners LP, together with Tudor, Pickering, Holt & Co. Securities LLC and Perella Weinberg Partners Capital Management LP, which self-reported, agreed to pay a $2.5 million penalty in 2023.
The SEC's order found that Perella’s "senior management, partners, and managing directors across each firm, including those responsible for supervising junior employees, failed to comply with Perella policies by communicating using non-firm approved methods on their personal devices about Perella’s broker-dealer and/or investment adviser businesses, as applicable."
Kroll Bond Rating Agency additionally argued to the SEC that undertakings it agreed to in September 2023, which included paying a $4 million penalty, "are particularly ill-suited to it because it is a relatively small nationally-recognized statistical rating organization, or NRSRO."
"However, Kroll was an NRSRO when it agreed to its settled order, and it does not argue that anything about its NRSRO status or size has changed since then," the SEC said Thursday.
The SEC found that since at least January 2020, Kroll Bond Rating Agency "employees, including senior executives and heads of rating groups, sent and received numerous text messages concerning credit rating activities on their personal and KBRA-issued mobile devices."
LPL, Raymond James Denials
In April, the SEC denied a request by 16 firms to modify their settlement terms related to off-channel communications violations.
In 2023 and 2024, the SEC issued 16 separate orders against financial firms — including Ameriprise Financial, LPL Financial, Raymond James and Osaic — for violations related to employees using personal devices for business communications.
The firms wanted to replace a two-year compliance consultant process with a one-time audit, remove requirements to report employee discipline, and eliminate heightened supervision by the Financial Industry Regulatory Authority.
The firms sought to modify the terms of their orders to match those of firms that settled in January 2025, saying those firms received more favorable settlement deals.
Perella Weinberg and Kroll requested the same relief. However, the SEC reiterated that "a party’s belief that subsequent parties negotiated better settlement terms is not a compelling circumstance that justifies altering the terms of a prior settlement."
FINRA Steps In
FINRA CEO Robert Cook said in May that the heightened supervision requirements had triggered heavy compliance burdens for firms.
"Although FINRA had no input into the terms of the [off-channel communications] OCC settlements between the firms and the SEC, the pre-2025 settlements ordered undertakings that triggered collateral consequences for the firms with respect to their membership in FINRA and other self-regulatory organizations (SROs)," Cook and Greg Ruppert, executive vice president and Head of Member Supervision at FINRA, said in a blog post.
"FINRA will consult with the SEC and other SROs to modify these collateral consequences, consistent with investor protection considerations," Cook and Ruppert said.
FINRA declined to comment Friday on the Perella Weinberg and Kroll denials, and referred to Cook's previous comments on the matter.
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