Quick Hits

• The SEC has been actively targeting regulated entities for recordkeeping violations related to off-channel communications, with recent settlements involving six credit rating agencies amounting to over $49 million in civil penalties.
• The SEC has also been enforcing actions to protect whistleblowers, announcing settlements with seven public companies for over $3 million in civil penalties for using agreements that allegedly impede employees from reporting securities law violations.
• The DOJ launched the Corporate Whistleblower Awards Pilot Program on August 1, 2024, aiming to incentivize whistleblowers to disclose misconduct by empowering them to share in the net proceeds of any monetary forfeiture recovered by the government.

SEC Targets Off-Channel Communications

On September 3, 2024, the SEC announced that six credit rating agencies agreed to pay more than $49 million in civil penalties to the SEC related to employees using noncompany-controlled texting and other messaging platforms, known as off-channel communications, to discuss their credit rating businesses.

These settlements are the latest in a series of enforcement actions against regulated entities for recordkeeping violations for off-channel communications over the past few years that have resulted in billions of dollars in civil penalties. In August 2024, the SEC levied nearly $400 million in civil penalties against twenty-six other registered broker-dealers, investment advisers, and...

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