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ARTICLE · 01 JUNE 2023

SEC Off-Channel Communications Sweep

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Over the last several years, the Securities and Exchange Commission (the "SEC") and the Commodities Futures Trading Commission ("CFTC") have been laser-focused...

United StatesFinance and Banking
Kate Rumsey
Kate Rumsey
Christopher Bosch
Christopher Bosch
Michael J. Gilbert
Michael J. Gilbert
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Over the last several years, the Securities and Exchange Commission (the "SEC") and the Commodities Futures Trading Commission ("CFTC") have been laser-focused on the use of so called "off-channel communications" in the financial services industry. On the theory that employees' use of personal devices to communicate about business matters violates the "books and records" rules as these communications are not saved in company systems, regulators have conducted intrusive and extensive investigations requiring employees to turn over their personal devices for review. SEC Chairperson Gary Gensler recently stated that "bookkeeping sweeps are ongoing," having resulted in well over $1 billion in fines so far. While the first round of investigations focused on the large banks, this "sweep" has since spread to hedge funds, credit rating agencies, online banking platforms, and now, to regional banks.

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