RBC, TD to pay millions to settle U.S. SEC charges over recordkeeping violations

RBC and TD Bank Group have agreed to pay tens of millions of dollars in penalties after being charged by the U.S. Securities and Exchange Commission over recordkeeping violations.

RBC Capital Markets has agreed to pay US$45 million. Various TD divisions, including its recently acquired Cowen and Co., have agreed to pay a US$46.5 million penalty to the SEC plus a total of US$82 million to the U.S. Commodity Futures Trading Commission.

The two banks are among 26 financial institutions that the SEC announced Wednesday had together agreed to pay about US$393 million along with implementing improvements to compliance policies.

The enforcement action is related to the use of electronic communications through text messages and other alternative channels that weren’t being preserved as required.

The regulator says it found “pervasive” levels of off-channel communications at the two banks, both between employees and with clients.

RBC said in a statement it was pleased to have resolved the matter and remains focused on upholding all regulatory requirements. TD said it co-operated fully with regulators and that it’s enhancing its electronic communications policies and procedures.

The penalties are part of a wider enforcement effort by U.S. regulators over communications methods that has led to over US$1.2 billion in penalties, including past payments made by Scotiabank and the Bank of Montreal.

This report by The Canadian Press was first published Aug. 15, 2024.