New-York-based broker dealer BGC Financial has agreed to pay a $1.25 million fine to settle allegations that it deleted records sought after by US authorities.
The Securities and Exchange Commission (SEC) has issued an order to BGC which states that after receiving data requests in 2014 from the regulator’s division of enforcement, the broker dealer deleted audio files from the telephone lines of eight brokers.
BGC’s department responsible for keeping the records alleged that it was unaware of the SEC’s request, and deleted the files in line with company policy of not maintaining them for longer than a year.
“The federal securities laws require broker-dealers to maintain accurate books and records and promptly provide records requested by SEC staff,” said Marc Berger, director of the SEC’s New York regional office.
“The failure to preserve and produce responsive documents undermines the Commission’s ability to provide effective oversight of registrants and to carry out its mission to protect investors.”
BGC also allegedly failed to maintain and records data of compensation, travel, entertainment and gifts. It provided one high performing broker with season tickets for a sports team that cost more than $600,000 a year, but did not keep a record of the payments for the tickets.
The same broker also received a $100,000 reimbursement for expenses associated with an international trip for his birthday without sufficient documented business purposes. BGC inaccurately recorded these items in its books and records as selling and promotion, the SEC concluded.
The broker dealer has agreed to a cease and desist order and to pay the $1.25 million penalty, although it did not admit or deny the US authority’s findings.