Two of Canada’s largest banks, RBC and TD, have agreed to pay millions of dollars to settle charges brought by the U.S. Securities and Exchange Commission (SEC) over recordkeeping violations.
According to the SEC, RBC and TD failed to maintain accurate books and records for several of their investment advisory programs. This resulted in the banks providing incorrect information to clients and regulators, ultimately leading to the charges.
RBC has agreed to pay $800,000 in penalties and disgorgement, while TD will pay $500,000. Both banks have also agreed to undertake remedial measures to improve their recordkeeping practices.
In a statement, RBC acknowledged the SEC’s findings and stated that they have already taken steps to address the issues raised. TD also released a statement, stating that they have cooperated fully with the SEC and have implemented changes to their recordkeeping processes.
The SEC’s investigation found that RBC and TD failed to maintain accurate records for their wrap fee programs, which charge clients a single fee for bundled investment services. The banks also failed to maintain accurate records for their separately managed account programs, which provide individualized investment services.
The SEC noted that accurate recordkeeping is crucial for investment advisers to fulfill their fiduciary duties to clients and comply with regulatory requirements. The settlement with RBC and TD serves as a reminder to all investment advisers to maintain accurate and complete records.
The SEC’s investigation was conducted by the Asset Management Unit of the Division of Enforcement, which focuses on misconduct in the investment advisory industry. The settlement with RBC and TD is subject to court approval.
This settlement highlights the importance of proper recordkeeping in the financial industry and serves as a warning to other institutions to ensure they are meeting their obligations.
