BGC Financial, a New York-based broker-dealer firm, agreed to pay the SEC $1.25 million, and to be censured and to cease and desist from violating Exchange Act, Section 17(a)(1)/Rule 17a-3 for failing to accurately record, maintain, preserve and submit to the Commission upon request, audio files of eight brokers’ recorded telephone lines and paper files evidencing the broker-dealers’ compensation, entertainment, travel, and gifts (In the Matter of BGC Financial, L.P., Release No. 34-83650, July 17, 2018).
Expenses not properly accounted for or submitted to the SEC by BGC:
- providing season tickets to a high performing broker-dealer for New York sports team games that cost more than $600,000 per year;
- reimbursing that same high performing broker-dealer more than $100,000 for an international trip he took for his birthday that lacked a sufficient documented business purpose; and
- reimbursing a different broker-dealer for thousands of dollars of personal expenses he spent on his birthday, bachelor party, and two separate trips to Las Vegas for his friends’ bachelor parties.
BGC, moreover, inaccurately recorded the above items in the firm’s books and records as selling and promotion expenses.
The SEC’s New York Regional Office Director, Marc P. Berger, remarked that "federal securities laws require broker-dealers to maintain accurate books and records and promptly provide records requested by SEC Staff. 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."
The release is No. 34-83650.
Company: BGC Financial, L.P.
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