“Today’s actions against these 16 firms result from our continuing efforts to ensure that all regulated entities comply with the recordkeeping requirements, which are essential to our ability to monitor and enforce compliance with the federal securities laws.”

Big names on Wall Street are facing a hefty text message bill. The Securities and Exchange Commission (SEC) announced today that it has slapped 16 financial firms with a combined $81 million in penalties for failing to keep records of employee communications on personal devices.

The SEC’s investigation uncovered a widespread practice among these firms, including major players like Northwestern Mutual, Guggenheim, and Oppenheimer, of allowing employees to use personal phones and text messages for business purposes. However, these companies then failed to properly preserve those communications, violating federal recordkeeping requirements.

Penalties range from $1.25 million to $16.5 million

The SEC found that this practice of “off-channel communication” had been going on for several years, with employees at all levels, including supervisors and senior managers, using personal devices for business conversations. The messages covered topics like investment recommendations, client information, and even potential violations of securities laws.

While the convenience of texting may have been tempting, the consequences are proving costly.

Each of the 16 firms agreed to pay a penalty ranging from $1.25 million to $16.5 million, with the higher amounts reserved for repeat offenders.

Northwestern Mutual agreed to pay a $16.5 million penalty;

Guggenheim agreed to pay a $15 million penalty;

Oppenheimer agreed to pay a $12 million penalty;

Cambridge agreed to pay a $10 million penalty;

Key agreed to pay a $10 million penalty;

Lincoln agreed to pay an $8.5 million penalty;

U.S. Bancorp agreed to pay an $8 million penalty;

Huntington, which self-reported, agreed to pay a $1.25 million penalty.

Additionally, they face a cease-and-desist order, meaning they must stop the illegal practice and improve their recordkeeping policies. Some firms will even have to hire independent consultants to review their procedures and ensure compliance.

“Today’s actions against these 16 firms result from our continuing efforts to ensure that all regulated entities comply with the recordkeeping requirements, which are essential to our ability to monitor and enforce compliance with the federal securities laws,” said Gurbir S. Grewal, Director of the SEC’s Division of Enforcement. “Once again, one of these orders is not like the others: Huntington’s penalty reflects its voluntary self-report and cooperation.”