SEC Fines Seven More Broker/Dealers

The SEC has nailed some additional broker/dealers for failing to disclose payment relationships they had with companies their research departments covered.

The SEC has nailed some additional broker/dealers for failing to disclose payment relationships they had with companies their research departments covered.

When measured against the $1.4 billion fines levied against the largest firms, this new round seems small—$3.65 million to seven different firms. But the case is evidence of the SEC following through on its promise of continued vigilance on such matters.

The SEC says it fined the firms for receiving payments from other b/ds to cover specifically targeted public or soon-to-become public companies but never disclosing the arrangements or the amount of money given.

In addition, four of the firms were charged—without a fine being disclosed—for improper archiving of email messages.

The firms charged, along with the size of their fine:

  • Janney Montgomery Scott, $875,000 (also charged with improper email archiving)
  • Morgan Keegan, $875,000 (also charged with improper email archiving)
  • Needham & Co., $700,000 (also charged with improper email archiving)
  • Adams Harkness, $575,000 (also charged with improper email archiving)
  • Prudential Equity, $375,000
  • Friedman Billings, $125,000
  • SG Cowen, $125,000

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