SEC's Off-Channel Communications Enforcement Continues at a Torrid Pace

The SEC continues its vigorous enforcement of recordkeeping violations related to off-channel communications in January 2025. In the first half of the month alone, the SEC issued administrative orders and settlements involving at least two dozen entities that failed to meet their recordkeeping obligations for off-channel communications. "Off-channel communications" refers to the use of communication media that are not easily captured by an entity's recordkeeping program, such as WhatsApp, texting, and instant messaging.

The SEC has warned that it will continue these efforts as part of its fiscal year 2025 enforcement priorities. Since these efforts began over three years ago, the SEC has brought enforcement actions against hundreds of entities, resulting in billions of dollars in civil penalties. Virtually every type of entity under the SEC's jurisdiction has faced enforcement, including investment and commercial banks, investment advisors, broker-dealers, non-financial registrants (including non-accelerated filers), municipal advisors, and credit rating agencies.

Every entity subject to the SEC's jurisdiction is strongly advised to ensure compliance with its recordkeeping obligations, including those related to off-channel communications.