Best Practices to Prepare for the SEC’s Continued Scrutiny of Business Communications

Communications surveillance remains a key focus for the U.S. Securities and Exchange Commission (SEC).

In a familiar scenario, the SEC announced today a settlement with 12 further firms for recordkeeping violations, imposing a total of $63.1 million in fines. The orders note that employees at all levels sent and received off-channel communications related to investment recommendations and other advice, which the firms failed to record. Notably, the Republican commissioners did not issue statements objecting to the orders.

Communication surveillance best practices

Firms must demonstrate to the regulator that they have a reasonably-designed, proactive program in place. This should include a clear communications policy, ongoing employee education of acceptable channels, and tools to review communications and detect any non-compliant activity.

Here is a list of best practices to help your firm establish set and maintain effective surveillance of business communications:

• Conduct a comprehensive assessment: Identify all communication channels in use, and review existing policies to ensure they are up-to-date and cover all necessary aspects, including personal device usage. Consider regional and generational differences in communication preferences, which may require tailored compliance strategies.
• Ensure capture of required communications: All communications on approved channels must be captured and archived effectively.
• Utilize AI to uncover potential off-channel communications: Advanced technologies like AI (e.g. natural language processing, or NLP) can help uncover hidden trends and patterns in centralized data archives. These tools aid in regulatory compliance and identify when conversations may have shifted to unapproved communication channels.
• Provide comprehensive training: Educate employees on permitted communication channels and ensure they understand the policies.
• Employee certifications and attestations: Regularly collect attestations from employees to confirm compliance with communication policies.
• Enhanced testing and monitoring: Conduct thorough testing to identify any non-compliance and evaluate the need for enhanced e-communication surveillance and monitoring tools.

Effective communications surveillance should be an ongoing initiative led by the compliance team and supported by the entire firm. The SEC has repeatedly emphasized that no one in the firm is exempt from communication policies and the regulator may review communications from any point in time. By implementing these best practices and ensuring all levels of employees adhere to company policy, your firm can protect itself from similar enforcement actions.

How we help

ACA’s eComms Archive and Surveillance Solution provides seamless, end-to-end capabilities for capturing, archiving, and surveilling communications across a wide range of platforms. Key features include:

• Capture: Ingests communications from a variety of connectors, such as Microsoft, Gmail, Bloomberg Chats, iMessage, WhatsApp, LinkedIn, and more.
• Archive: Delivers rapid search and export functions to accelerate responses to regulatory inquiries.
• Surveillance: Utilizes AI-driven tools to monitor high-risk activities with precision, providing robust data curation and risk detection features.

By integrating advanced technology with our deep regulatory expertise, our solution enables firms to meet the increasingly complex demands of digital communications governance. With enhanced archive features designed for efficient research and extraction, and AI-powered surveillance tools for precise content curation, we help firms improve both compliance effectiveness and efficiency.

Additionally, our experienced Managed Services team can assist in parsing through surveillance results and streamlining the review process. With specialized expertise, they can save your team valuable time and resources.

Contact us today to learn how we can transform your communications compliance program and help you launch, grow, and protect your firm.

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