SEC: During A Pending Investigation - Firm Is Censured And Pays A $10 Million Penalty To Settle Charges

The Securities and Exchange Commission announced today a settled enforcement action against Banc of America Securities LLC (BAS) for violations of the recordkeeping and access requirements of the securities laws. The violations occurred during a pending Commission investigation that is seeking to determine whether, among other things, BAS engaged in improper trading of securities prior to the firm's issuance of research concerning such securities. As part of the settlement, BAS has agreed to a censure and a $10 million civil penalty.

The Commission found that BAS repeatedly failed to promptly furnish documents requested by the staff, provided misinformation concerning the availability and production status of such documents, and engaged in dilatory tactics that delayed the investigation.

"Today's action makes clear that we will not tolerate unreasonable delay in responding to our inquiries and will act aggressively to protect the integrity of the Commission's investigative processes," said Stephen Cutler, Director of the Commission's Division of Enforcement.

The Commission's order finds that BAS willfully failed to preserve or promptly furnish certain records after they were requested. In particular, the Commission found that BAS failed promptly to produce (i) electronic mail, including a particular e-mail exchange relating to matters that BAS knew were under investigation, (ii) certain compliance reviews, and (iii) compliance and supervision records concerning the personal trading activities of a former senior employee of the firm.

In addition to the censure and $10 million penalty, BAS consented, without admitting or denying the Commission's findings, to cease and desist from committing or causing violations of Sections 17(a) and 17(b) of the Securities Exchange Act of 1934 and Rule 17a-4(j) thereunder.

The Commission's investigation is continuing.