In Journal of Financial Compliance, Litigation & Enforcement Attorneys Discuss Compliance Risks of Off-Channel Communications for Financial Sector

In a new article in the Journal of Financial Compliance, litigation & enforcement attorneys Amy Jane Longo, Dan O’Connor, Shannon Capone Kirk, Cole A. Goodman and Jake Barr discuss the shift to so-called ‘off-channel’ communications—app-based messaging platforms outside of email, the traditional channel for business communications—and how this trend has led to increased regulatory scrutiny, particularly in the financial sector.

The SEC alone has imposed more than $2 billion in fines for non-compliance with record-keeping rules related to these off-channel communications. However, they are not the only agency enforcing these requirements, with the CFTC and FINRA also taking enforcement actions related to this type of electronic communication, and the Department of Justice is incorporating this aspect of corporate compliance programs into its prosecutorial principles.

The article highlights the challenges companies face in capturing and retaining these communications, the regulatory frameworks involved, and the need for robust compliance programs. It also provides practical guidance for compliance officers on policies, training, technology, and monitoring to ensure adherence to regulations. The article underscores the importance of adapting to the evolving communication landscape and the heightened expectations for compliance programs.