Navigating Compliance Risks: Solving the Challenges of Modern Communication

Recent enforcement actions from the Securities and Exchange Commission (SEC) have highlighted a growing concern in the financial industry: the failure of investment advisers and broker-dealers to comply with electronic communication record-keeping requirements.

Charges were announced against 11 firms for widespread deficiencies in maintaining and preserving their electronic communications. These violations, tied to federal securities laws and record-keeping provisions, resulted in over $63 million in combined penalties.

These firms – encompassing both broker-dealers and investment advisers – were found to have failed to retain business-related communications conducted via popular messaging platforms like WhatsApp and iMessage. By allowing employees to use personal devices for business communications without proper oversight, these organisations violated critical recordkeeping requirements outlined in the Securities Exchange Act of 1934 and the Investment Advisers Act of 1940.

The penalties follow the SEC’s broader initiative to clamp down on lapses in communication compliance. Gurbir S. Grewal, Director of the SEC’s Division of Enforcement, emphasised the importance of accountability:

“Compliance with the books and records requirements of the federal securities laws is essential to investor protection and well-functioning markets. The SEC’s ongoing investigations uncovered pervasive and longstanding failures by these firms to maintain and preserve electronic communications.”

These enforcement actions send a clear message: firms must implement stronger compliance frameworks to manage the complexities of modern communication.

The Increasing Risks of Non-Compliance

With the rise of remote work and digital communication, the financial industry faces unprecedented challenges in monitoring and archiving business-related interactions. Employees frequently use third-party messaging apps and personal devices to conduct business, creating compliance blind spots. As the SEC has demonstrated, overlooking these blind spots can lead to severe consequences, including financial penalties, reputational harm, and loss of client trust.

Firms need to adopt proactive strategies to ensure compliance with evolving regulatory standards. This is where DeepView comes in.

How DeepView Empowers Firms to Achieve Compliance

At DeepView, we understand that compliance is not just a regulatory necessity but a strategic imperative. Our platform provides comprehensive solutions to help firms meet and exceed regulatory expectations for electronic communication compliance.

Key Features of DeepView’s Compliance Solutions

1. Comprehensive Archiving and Monitoring:
   DeepView enables firms to capture and archive communications from various platforms, including messaging apps, text messages, and voice calls. This ensures that all business-related interactions are securely stored, searchable, and retrievable for regulatory audits or investigations.
2. Regulatory Alignment:
   Built to meet global compliance standards, DeepView helps firms adhere to the requirements of the SEC, FINRA, FCA, and other regulators. This ensures that communication policies are always aligned with the latest legal mandates.
3. Seamless Work and Personal Communication Separation:
   DeepView’s platform makes it easy to distinguish between work-related and personal communications. By enabling employees to use their preferred devices and apps without compromising compliance, DeepView fosters productivity while ensuring regulatory adherence.
4. Proactive Risk Mitigation:
   DeepView provides real-time alerts for potential compliance risks, including data leaks or inappropriate sharing of sensitive information. This proactive approach allows firms to address issues before they escalate.

The Smart Solution for Modern Compliance Challenges

The SEC’s enforcement actions underscore the need for solutions that are tailored to the realities of modern communication. DeepView stands out as the partner of choice for firms looking to enhance their compliance strategies.

• Ease of Use: DeepView’s intuitive interface ensures a smooth onboarding process and minimises disruption to daily operations.
• Scalability: Whether you’re a small firm or a global organisation, DeepView’s solutions adapt to meet your unique needs.
• Future-Proofing: As regulations evolve, DeepView’s platform evolves with them, ensuring your compliance framework remains robust.

Avoiding Costly Penalties and Safeguarding Trust

The SEC has made it clear: non-compliance with electronic communication requirements is a risk no firm can afford. Beyond the financial penalties, failure to comply jeopardises client trust and the integrity of financial markets. By investing in DeepView’s comprehensive compliance solutions, firms can mitigate risks, protect reputations, and focus on what matters most – delivering value to clients.

Take the First Step Toward Smarter Compliance

DeepView is here to help your firm stay ahead in the ever-changing regulatory landscape. With our cutting-edge technology and expertise, we simplify compliance and ensure your firm operates with confidence and transparency.

Contact us today to learn more about how DeepView can empower your organisation to meet the challenges of modern compliance.