In Regulatory Wrap for the week to April 18, Kathryn Fallah unpacks what the SEC deems a case of “settlor’s remorse” following a request by 16 firms to amend off-channel communications settlements.
In this week’s Regulatory Wrap, we focus on a surprising motion raised to the Securities and Exchange Commission (SEC): 16 firms asked the regulator if they could “modify or amend” old off-channel communications settlements for milder terms.
1. 16 firms asked the SEC to “modify or amend” previous off-channel communications settlements agreed on between September 2023 and 2024
2. As part of the original settled orders, the firms agreed to ongoing compliance commitments, such as engaging third-party compliance consultants and reporting employee discipline relating to further off-channel comms violations
3. The firms asked the SEC to amend the agreements and lift the imposed requirements, arguing that the settlements occurring after their agreements had included “better terms”
4. In response, the SEC reminded the firms that they “agreed to the undertakings to which they now object,” and that “settlor’s remorse does not justify upsetting a final agreed-upon order”
5. Despite the regulator undergoing a period of change over the past few months, such as with its stance on AI and crypto, the SEC is reaffirming that it is still standing strong on off-channel communications compliance
This week’s episode is brought to you by our Content Writer, Kathryn Fallah.
The SEC has made clear that early settlements do not guarantee renegotiation perks. Instead, the only surefire way to shirk regulatory reprimand is to ensure record retention across all communication channels.
