In re Regions Securities LLC

 
  
 
 
 
UNITED STATES OF AMERICA 
 Before the 
 SECURITIES AND EXCHANGE COMMISSION 
 
SECURITIES EXCHANGE ACT OF 1934 
Release No. 101140 / September 24, 2024 
 
ADMINISTRATIVE PROCEEDING 
File No. 3-22163 
 
 
In the Matter of 
 
Regions Securities LLC, 
 
Respondent. 
 
ORDER INSTITUTING ADMINISTRATIVE 
AND CEASE-AND-DESIST PROCEEDINGS, 
PURSUANT TO SECTIONS 15(b) AND 21C 
OF THE SECURITIES EXCHANGE ACT OF 
1934, MAKING FINDINGS, AND IMPOSING 
REMEDIAL SANCTIONS AND A CEASE-
AND-DESIST ORDER 
 
 
 
I. 
 The Securities and Exchange Commission (“Commission”) deems it appropriate and in 
the public interest that public administrative and cease-and-desist proceedings be, and hereby 
are, instituted pursuant to Sections 15(b) and 21C of the Securities Exchange Act of 1934 
(“Exchange Act”) against Regions Securities LLC (“Respondent” or “Regions”). 
 
II. 
 In anticipation of the institution of these proceedings, Respondent has submitted an Offer 
of Settlement (“Offer”) that the Commission has determined to accept.  Respondent admits the 
facts set forth in Section III below, acknowledges that its conduct violated the federal securities 
laws, admits the Commission’s jurisdiction over it and the subject matter of these proceedings, and 
consents to the entry of this Order Instituting Administrative and Cease-and-Desist Proceedings, 
Pursuant to Sections 15(b) and 21C of the Securities Exchange Act of 1934, Making Findings, 
and Imposing Remedial Sanctions and a Cease-and-Desist Order (“Order”), as set forth below.   
 
III. 
 On the basis of this Order and Respondent’s Offer, the Commission finds
1
 that: 
 
 
1
  The findings herein are made pursuant to Respondent’s Offer of Settlement and are not 
binding on any other person or entity in this or any other proceeding.  

 
  
 
2 
Summary 
1. The federal securities laws impose recordkeeping requirements on broker-dealers 
to ensure that they responsibly discharge their crucial role in our markets.  The Commission has 
long said that compliance with these requirements is essential to investor protection and the 
Commission’s efforts to further its mandate of protecting investors, maintaining fair, orderly, and 
efficient markets, and facilitating capital formation.  
2. These proceedings arise out of Regions’ identification—and self-report—of 
widespread failures of certain Regions personnel, including at senior levels, to adhere to certain 
of these essential requirements and Regions’ own policies and procedures.  Using their personal 
devices, these personnel communicated both internally and externally by text messages (“off-
channel communications”). 
3. After Regions’ compliance staff identified business-related electronic 
communications on a non-approved platform on personal devices, Regions conducted an internal 
investigation and self-reported the facts to the Commission staff.  Respondent proactively 
identified key documents and facts, which assisted the Commission staff in efficiently 
investigating the conduct.  Prior to contacting the Division of Enforcement, Respondent also 
undertook significant efforts to comply relating to its recordkeeping practices, policies and 
procedures, and related supervisory practices. 
4. From at least September 2019 (the “Relevant Period”), Regions personnel sent 
and received off-channel communications that were records required to be maintained under 
Exchange Act Rule 17a-4(b)(4).  Respondent did not maintain or preserve the substantial 
majority of these written communications.  Respondent’s failures were firm-wide and involved 
personnel at various levels of authority.  As a result, Respondent violated Section 17(a) of the 
Exchange Act and Rule 17a-4(b)(4) thereunder. 
5. Regions’ supervisors, who were responsible for supervising junior personnel, 
routinely communicated off-channel using their personal devices.  In fact, managers and officers 
responsible for supervising junior personnel themselves failed to comply with Regions’ policies 
and procedures by communicating, through non-approved methods, on their personal devices 
about Regions’ broker-dealer business.  
6. Regions’ widespread failure to implement a system of follow-up and review 
reasonably expected to determine whether personnel were following its policies and procedures 
that prohibit off-channel communications led to its failure to reasonably supervise its personnel 
within the meaning of Section 15(b)(4)(E) of the Exchange Act.  
7. During the time period that Regions failed to maintain and preserve off-channel 
communications that its personnel sent and received related to its broker-dealer business, 
Regions received and responded to a Commission records request in one Commission 
investigation.  As a result, Regions’ recordkeeping failures likely impacted the Commission’s 
ability to carry out its regulatory functions and investigate violations of the federal securities 
laws in that investigation.   

 
  
 
3 
8. After Regions initiated a review of its recordkeeping efforts, Regions identified 
failures and self-reported its conduct, and further enhanced its ongoing efforts to comply.  As set 
forth in the Undertakings below, Regions will retain an independent compliance consultant to 
review and assess Regions’ remedial steps relating to its recordkeeping practices, policies and 
procedures, related supervisory practices, and employment actions. 
Respondent 
9. Regions Securities LLC is a Delaware limited liability company with its 
principal office in Atlanta, Georgia and has been registered with the Commission as a broker-
dealer since July 25, 2012.  
Recordkeeping Requirements under the Exchange Act 
10. Section 17(a)(1) of the Exchange Act authorizes the Commission to issue rules 
requiring broker-dealers to make and keep for prescribed periods, and furnish copies of, such 
records as necessary or appropriate in the public interest, for the protection of investors or 
otherwise in furtherance of the purposes of the Exchange Act. 
11. The Commission adopted Rule 17a-4 under the Exchange Act pursuant to this 
authority.  Rule 17a-4 specifies the manner and length of time that the records made in 
accordance with Commission rules, and certain other records made by broker-dealers, must be 
maintained and produced promptly to Commission representatives.   
12. The rules adopted under Section 17(a)(1) of the Exchange Act, including Rule 
17a-4(b)(4), require that broker-dealers preserve for at least three years, the first two years in an 
easily accessible place, originals of all written communications received and copies of all written 
communications sent relating to the broker-dealer’s business as such.  These rules impose 
minimum recordkeeping requirements that are based on standards a prudent broker-dealer should 
follow in the normal course of business.  
13. The Commission previously has stated that these and other recordkeeping 
requirements “are an integral part of the investor protection function of the Commission, and 
other securities regulators, in that the preserved records are the primary means of monitoring 
compliance with applicable securities laws, including antifraud provisions and financial 
responsibility standards.”  Commission Guidance to Broker-Dealers on the Use of Electronic 
Storage Media under the Electronic Signatures in Global and National Commerce Act of 2000 
with Respect to Rule 17a-4(f), 17 C.F.R. Part 241, Exchange Act Rel. No. 44238 (May 1, 2001). 
Regions’ Policies and Procedures 
14. Regions maintained certain policies and procedures designed to ensure the 
retention of business-related records, including electronic communications, in compliance with 
the relevant recordkeeping provisions.   
15. Regions personnel were advised that the use of unapproved electronic 
communications methods, including on their personal devices, was not permitted, and they 
should not use personal email, chats or text messaging applications for business purposes.  

 
  
 
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16. Messages sent through Regions’ approved communications methods were 
monitored, subject to review, and, when appropriate, archived.  Messages sent through 
unapproved communications methods, such as text messaging, and those sent from unapproved 
applications on personal devices, were not monitored, subject to review or archived. 
17. Since at least 2018, Regions has conducted various electronic communication-
related trainings on its policies prohibiting off-channel communications for supervisors and other 
personnel.  In 2019, Regions added various electronic-communication related trainings as part of 
its associate training program.  During the Relevant Period, Regions had procedures for all 
personnel, including supervisors, requiring annual self-attestations of compliance.  
18. Regions, however, failed to implement a system reasonably expected to determine 
whether all personnel, including supervisors, were following Regions’ policies and procedures.  
While permitting personnel to use approved communications methods, including on personal 
phones, for business communications, Regions failed to implement sufficient monitoring to 
ensure that its recordkeeping and communications policies were being followed.  
Regions’ Recordkeeping Failures Across Its Brokerage Business 
19. In September 2021, the Commission staff commenced a risk-based initiative to 
investigate whether broker-dealers were properly retaining business-related messages sent and 
received on personal devices.  In June 2024, Regions voluntarily contacted the staff regarding 
certain off-channel communications that it had identified related to the business of Regions.  
Regions cooperated with the staff’s investigation by proactively gathering communications from 
the personal devices of its personnel and responding to the staff’s requests for additional 
information.  As reported to the Commission staff, Regions personnel who had engaged in the 
use of off-channel communications included senior managers and officers across the firm. 
20. Regions alerted the Commission staff to numerous off-channel communications at 
various seniority levels of Regions.  Respondent collected data from a sampling of its personnel at 
various seniority levels and found that most had engaged in at least some level of off-channel 
communications during the Relevant Period.  Overall, these personnel sent and received numerous 
off-channel communications, involving other Regions personnel and external contacts in the 
securities industry.  As disclosed to the Commission staff, within Regions, a number of senior 
leaders participated in off-channel communications. 
21. During the Relevant Period, Regions personnel sent and received off-channel 
communications that concerned its broker-dealer business.   
22. For example, in October and November 2022, Regions personnel exchanged off-
channel messages with a customer regarding the strategy and terms for a potential merger and 
acquisition transaction.  These messages related to Regions’ broker-dealer business as such. 

 
  
 
5 
Regions’ Failure to Preserve Required Records Potentially 
Compromised and Delayed a Commission Matter 
23. During the Relevant Period, Regions received and responded to a Commission 
records request in one Commission investigation.  By failing to maintain and preserve required 
records relating to its broker-dealer business, Regions likely deprived the Commission of off-
channel communications in that investigation. 
Regions’ Violations and Failure to Supervise 
24. As a result of the conduct described above, during the Relevant Period, Regions 
willfully
2
 violated Section 17(a) of the Exchange Act and Rule 17a-4(b)(4) thereunder.   
25. As a result of the conduct described above, during the Relevant Period, Regions 
failed reasonably to supervise its personnel with a view to preventing or detecting certain of its 
supervised persons’ aiding and abetting violations of Section 17(a) of the Exchange Act and Rule 
17a-4(b)(4) thereunder, within the meaning of Section 15(b)(4)(E) of the Exchange Act.  
Regions’ Self-Reporting, Cooperation, and Remedial Efforts 
26. In determining to accept the Offer, the Commission considered Regions’ self-
report, cooperation afforded to the Commission staff, and efforts to comply.  After identifying off-
channel communications, Respondent conducted an internal investigation and self-reported the 
facts to the Commission staff.  Prior to approaching the Commission staff, since at least January 
2019, Regions had begun enhancing its efforts to comply, which included increasing trainings, 
sending reminders that emphasized the importance of complying with recordkeeping obligations, 
updating its existing electronic communication policies and procedures, and designating principals 
who are responsible for reviewing and monitoring their associates’ electronic communications on a 
regular basis.  In early 2024, Regions began making corporate devices available to personnel, 
thereby making approved channels more readily available, updating the frequency of the 
requirement to attest to compliance with Regions’ electronic communication policies and 
procedures from an annual to a quarterly basis, and implementing a monitoring program to conduct 
supervision and surveillance of all text messages on the corporate devices.  Regions also took 
proactive steps to collect and preserve off-channel communications.   
Undertakings 
27. Prior to this action, Regions enhanced its policies and procedures, and increased 
training concerning the use of approved communications methods, and began implementing 
changes to the technology available to its personnel.  In addition, Regions undertakes to: 
 
 
2
  “Willfully,” for purposes of imposing relief under Section 15(b) of the Exchange Act, 
“‘means no more than that the person charged with the duty knows what he is doing.’”  
Wonsover v. SEC, 205 F.3d 408, 414 (D.C. Cir 2000) (quoting Hughes v. SEC, 174 F.2d 969, 
977 (D.C. Cir. 1949)).  

 
  
 
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28. Independent Compliance Consultant. 
a.  Regions shall retain, within thirty (30) days of the entry of this Order, the 
services of an independent compliance consultant (“Compliance Consultant”) that is not 
unacceptable to the Commission staff.  The Compliance Consultant’s compensation and 
expenses shall be borne exclusively by Regions. 
 
b.  Regions will oversee the work of the Compliance Consultant. 
 
c.  Regions shall provide to the Commission staff, within sixty (60) days of the 
entry of this Order, a copy of the engagement letter detailing the Compliance 
Consultant’s responsibilities, which shall include a comprehensive compliance review as 
described below.  Regions shall require that, within ninety (90) days of the date of the 
engagement letter, the Compliance Consultant conduct: 
 
i.  A comprehensive review of Regions’ supervisory, compliance, and 
other policies and procedures designed to ensure that Regions’ electronic 
communications, including those found on personal electronic devices, including 
without limitation, cellular phones (“Personal Devices”), are preserved in 
accordance with the requirements of the federal securities laws. 
 
ii.  A comprehensive review of training conducted by Regions to ensure 
personnel are complying with the requirements regarding the preservation of 
electronic communications, including those found on Personal Devices, in 
accordance with the requirements of the federal securities laws, including by 
ensuring that Regions personnel certify in writing on a quarterly basis that they 
are complying with preservation requirements.  
 
iii.  An assessment of the surveillance program measures implemented by 
Regions to ensure compliance, on an ongoing basis, with the requirements found 
in the federal securities laws to preserve electronic communications, including 
those found on Personal Devices. 
 
iv.  An assessment of the technological solutions that Regions has begun 
implementing to meet the record retention requirements of the federal securities 
laws, including an assessment of the likelihood that Regions personnel will use 
the technological solutions going forward and a review of the measures employed 
by Regions to track personnel usage of new technological solutions.  
 
v.  An assessment of the measures used by Regions to prevent the use of 
unauthorized communications methods for business communications by its 
personnel.  This assessment should include, but not be limited to, a review of 
Regions’ policies and procedures to ascertain if they provide for any significant 
technology and/or behavioral restrictions that help prevent the risk of the use of 
unapproved communications methods on Personal Devices (e.g., trading floor 
restrictions).   

 
  
 
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vi.  A review of Regions’ electronic communications surveillance routines 
to ensure that electronic communications through approved communications 
methods found on Personal Devices are incorporated into Regions’ overall 
communications surveillance program.   
 
vii.  A comprehensive review of the framework adopted by Regions to 
address instances of non-compliance by Regions personnel with Regions’ policies 
and procedures concerning the use of Personal Devices to communicate about 
Regions’ business in the past.  This review shall include a survey of how Regions 
determined which personnel failed to comply with Regions’ policies and 
procedures, the corrective action carried out, an evaluation of who violated the 
policies and procedures and why, what penalties were imposed, and whether 
penalties were handed out consistently across business lines and seniority levels.   
 
d.  Regions shall require that, within forty-five (45) days after completion of the 
review set forth in sub-paragraphs 28.c.i. through 28.c.vii. above, the Compliance 
Consultant shall submit a detailed written report of its findings to Regions and to the 
Commission staff (the “Report”).  Regions shall require that the Report include a 
description of the review performed, the names of the individuals who performed the 
review, the conclusions reached, the Compliance Consultant’s recommendations for 
changes in or improvements to Regions’ policies and procedures, and a summary of the 
plan for implementing the recommended changes in or improvements to Regions’ 
policies and procedures. 
 
e.  Regions shall adopt all recommendations contained in the Report within ninety 
(90) days of the date of the Report; provided, however, that within forty-five (45) days 
after the date of the Report, Regions shall advise the Compliance Consultant and the 
Commission staff in writing of any recommendations that Regions considers to be unduly 
burdensome, impractical, or inappropriate.  With respect to any recommendation that 
Regions considers unduly burdensome, impractical, or inappropriate, Regions need not 
adopt such recommendation at that time, but shall propose in writing an alternative 
policy, procedure, or disclosure designed to achieve the same objective or purpose. 
 
f.  As to any recommendation concerning Regions’ policies or procedures on 
which Regions and the Compliance Consultant do not agree, Regions and the 
Compliance Consultant shall attempt in good faith to reach an agreement within sixty 
(60) days after the date of the Report.  Within fifteen (15) days after the conclusion of the 
discussion and evaluation by Regions and the Compliance Consultant, Regions shall 
require that the Compliance Consultant inform Regions and the Commission staff in 
writing of the Compliance Consultant’s final determination concerning any 
recommendation that Regions considers to be unduly burdensome, impractical, or 
inappropriate.  Regions shall abide by the determinations of the Compliance Consultant 
and, within sixty (60) days after final agreement between Regions and the Compliance 
Consultant or final determination by the Compliance Consultant, whichever occurs first, 

 
  
 
8 
Regions shall adopt and implement all of the recommendations that the Compliance 
Consultant deems appropriate. 
 
g.  Regions shall cooperate fully with the Compliance Consultant and shall 
provide the Compliance Consultant with access to such of Regions’ files, books, records, 
and personnel as are reasonably requested by the Compliance Consultant for review. 
 
h. Regions shall not have the authority to terminate the Compliance Consultant or 
substitute another compliance consultant for the initial Compliance Consultant, without 
the prior written approval of the Commission staff.  Regions shall compensate the 
Compliance Consultant and persons engaged to assist the Compliance Consultant for 
services rendered under this Order at their reasonable and customary rates. 
 
i.  For the period of engagement and for a period of two years from completion of 
the engagement, Regions shall not (i) retain the Compliance Consultant for any other 
professional services outside of the services described in this Order; (ii) enter into any 
other professional relationship with the Compliance Consultant, including any 
employment, consultant, attorney-client, auditing or other professional relationship; or 
(iii) enter, without prior written consent of the Commission staff, into any such 
professional relationship with any of the Compliance Consultant’s present or former 
affiliates, employers, directors, officers, employees, or agents. 
 
j.  The Report by the Compliance Consultant will likely include confidential 
financial, proprietary, competitive business or commercial information.  Public disclosure 
of the Report could discourage cooperation, impede pending or potential government 
investigations or undermine the objectives of the reporting requirement.  For these 
reasons, among others, the Report and the contents thereof are intended to remain and 
shall remain non-public, except (1) pursuant to court order, (2) as agreed to by the parties 
in writing, (3) to the extent that the Commission determines in its sole discretion that 
disclosure would be in furtherance of the Commission’s discharge of its duties and 
responsibilities, or (4) as otherwise required by law. 
 
29. One-Year Evaluation. Regions shall require the Compliance Consultant to assess 
Regions’ program for the preservation, as required under the federal securities laws, of electronic 
communications, including those found on Personal Devices, commencing one year after 
submitting the Report required by Paragraph 28.d above.  Regions shall require this review to 
evaluate Regions’ progress in the areas described in Paragraphs 28.c.i to 28.c.vii above.  After 
this review, Regions shall require the Compliance Consultant to submit a report (the “One Year 
Report”) to Regions and the Commission staff and shall ensure that the One Year Report 
includes an updated assessment of Regions’ policies and procedures with regard to the 
preservation of electronic communications (including those found on Personal Devices), training, 
surveillance programs, and technological solutions implemented in the prior year period.  
 

 
  
 
9 
30. Reporting Discipline Imposed.  For two (2) years following the entry of this Order, 
Regions shall notify the Commission staff as follows upon the imposition of any discipline 
imposed by Regions, including, but not limited to: written warnings; loss of any pay, bonus or 
incentive compensation; or the termination of personnel; with respect to any personnel found to 
have violated Regions’ policies and procedures concerning the preservation of electronic 
communications, including those found on Personal Devices: at least forty-eight (48) hours before 
the filing of a Form U5, or within ten (10) days of the imposition of other discipline.   
31. Internal Audit.  In addition to the Compliance Consultant’s review and issuance of 
the One Year Report, Regions will also have its Internal Audit function conduct a separate audit(s) 
to assess Regions’ progress in the areas described in Paragraphs 28.c.i to 28.c.vii above.  After 
completion of this audit(s), Regions shall ensure that Internal Audit submits a report to Regions 
and to the Commission staff. 
32. Recordkeeping.  Regions shall preserve, for a period of not less than six (6) years 
from the end of the fiscal year last used, the first two (2) years in an easily accessible place, any 
record of compliance with these undertakings.   
 
33. Deadlines.  For good cause shown, the Commission staff may extend any of the 
procedural dates relating to the undertakings.  Deadlines for procedural dates shall be counted in 
calendar days, except that if the last day falls on a weekend or federal holiday, the next business 
day shall be considered to be the last day. 
34. Certification.  Regions shall certify, in writing, compliance with the undertakings 
set forth above.  The certification shall identify the undertakings, provide written evidence of 
compliance in the form of a narrative, and be supported by exhibits sufficient to demonstrate 
compliance.  The Commission staff may make reasonable requests for further evidence of 
compliance, and Respondent agrees to provide such evidence.  The certification and supporting 
material shall be submitted to Amy S. Cotter, Assistant Director, Division of Enforcement, 
Chicago Regional Office, 175 West Jackson Boulevard, Suite 1450, Chicago, Illinois 60604, or 
such other person as the Commission staff may request, with a copy to the Office of Chief 
Counsel of the Enforcement Division, no later than sixty (60) days from the date of the 
completion of the undertakings. 
IV. 
 In view of the foregoing, the Commission deems it appropriate and in the public interest 
to impose the sanctions agreed to in Respondent’s Offer. 
 
 Accordingly, pursuant to Sections 15(b) and 21C of the Exchange Act, it is hereby 
ORDERED that: 
 
A. Respondent cease and desist from committing or causing any violations and any 
future violations of Section 17(a) of the Exchange Act and Rule 17a-4 thereunder. 
B. Respondent is censured.  
 

 
  
 
10 
C. Respondent shall comply with the undertakings enumerated in paragraphs 27 to 
34 above. 
 
D. Respondent shall, within 14 days of the entry of this Order, pay a civil money 
penalty in the amount of $750,000.00 to the Securities and Exchange Commission 
for transfer to the general fund of the United States Treasury, subject to Exchange 
Act Section 21F(g)(3).  If timely payment is not made, additional interest shall 
accrue pursuant to 31 U.S.C. § 3717.   
 
 Payment must be made in one of the following ways:   
 
(1) Respondent may transmit payment electronically to the Commission, 
which will provide detailed ACH transfer/Fedwire instructions upon 
request;  
 
(2) Respondent may make direct payment from a bank account via Pay.gov 
through the SEC website at http://www.sec.gov/about/offices/ofm.htm; or  
 
(3) Respondent may pay by certified check, bank cashier’s check, or United 
States postal money order, made payable to the Securities and Exchange 
Commission and hand-delivered or mailed to:  
 
Enterprise Services Center 
Accounts Receivable Branch 
HQ Bldg., Room 181, AMZ-341 
6500 South MacArthur Boulevard 
Oklahoma City, OK 73169 
 
Payments by check or money order must be accompanied by a cover letter identifying 
Regions as the Respondent in these proceedings, and the file number of these proceedings; a 
copy of the cover letter and check or money order must be sent to Amy S. Cotter, Assistant 
Regional Director, Division of Enforcement, Chicago Regional Office, 175 West Jackson 
Boulevard, Suite 1450, Chicago, Illinois 60604.   
 
 E. The amount ordered to be paid as a civil money penalty pursuant to this Order 
shall be treated as a penalty paid to the government for all purposes, including all tax purposes.  
To preserve the deterrent effect of the civil penalty, Respondent agrees that in any Related 
Investor Action, it shall not argue that it is entitled to, nor shall it benefit by, the offset or 
reduction of any award of compensatory damages by the amount of any part of Respondent’s 
payment of a civil penalty in this action (“Penalty Offset”).  If the court in any Related Investor 
Action grants such a Penalty Offset, Respondent agrees that it shall, within 30 days after entry of 
a final order granting the Penalty Offset, notify the Commission’s counsel in this action and pay 
the amount of the Penalty Offset to the Securities and Exchange Commission.  Such a payment 
shall not be deemed an additional civil penalty and shall not be deemed to change the amount of  
 
 

 
  
 
11 
 
 
 
 
the civil penalty imposed in this proceeding.  For purposes of this paragraph, a “Related Investor 
Action” means a private damages action brought against Respondent by or on behalf of one or 
more investors based on substantially the same facts as alleged in the Order instituted by the 
Commission in this proceeding. 
 
 By the Commission. 
 
 
 
Vanessa A. Countryman 
       Secretary 

UNITED STATES OF AMERICA 

 Before the 

 SECURITIES AND EXCHANGE COMMISSION 

 

SECURITIES EXCHANGE ACT OF 1934 

Release No. 101140 / September 24, 2024 

 

ADMINISTRATIVE PROCEEDING 

File No. 3-22163 

 

 

In the Matter of 

 

Regions Securities LLC, 

 

Respondent. 

 

ORDER INSTITUTING ADMINISTRATIVE 

AND CEASE-AND-DESIST PROCEEDINGS, 

PURSUANT TO SECTIONS 15(b) AND 21C 

OF THE SECURITIES EXCHANGE ACT OF 

1934, MAKING FINDINGS, AND IMPOSING 

REMEDIAL SANCTIONS AND A CEASE-

AND-DESIST ORDER 

 

 

 

I. 

 The Securities and Exchange Commission (“Commission”) deems it appropriate and in 

the public interest that public administrative and cease-and-desist proceedings be, and hereby 

are, instituted pursuant to Sections 15(b) and 21C of the Securities Exchange Act of 1934 

(“Exchange Act”) against Regions Securities LLC (“Respondent” or “Regions”). 

 

II. 

 In anticipation of the institution of these proceedings, Respondent has submitted an Offer 

of Settlement (“Offer”) that the Commission has determined to accept.  Respondent admits the 

facts set forth in Section III below, acknowledges that its conduct violated the federal securities 

laws, admits the Commission’s jurisdiction over it and the subject matter of these proceedings, and 

consents to the entry of this Order Instituting Administrative and Cease-and-Desist Proceedings, 

Pursuant to Sections 15(b) and 21C of the Securities Exchange Act of 1934, Making Findings, 

and Imposing Remedial Sanctions and a Cease-and-Desist Order (“Order”), as set forth below.   

 

III. 

 On the basis of this Order and Respondent’s Offer, the Commission finds1 that: 

 

 
1  The findings herein are made pursuant to Respondent’s Offer of Settlement and are not 

binding on any other person or entity in this or any other proceeding.  



 

  

 

2 

Summary 

1. The federal securities laws impose recordkeeping requirements on broker-dealers 

to ensure that they responsibly discharge their crucial role in our markets.  The Commission has 

long said that compliance with these requirements is essential to investor protection and the 

Commission’s efforts to further its mandate of protecting investors, maintaining fair, orderly, and 

efficient markets, and facilitating capital formation.  

2. These proceedings arise out of Regions’ identification—and self-report—of 

widespread failures of certain Regions personnel, including at senior levels, to adhere to certain 

of these essential requirements and Regions’ own policies and procedures.  Using their personal 

devices, these personnel communicated both internally and externally by text messages (“off-

channel communications”). 

3. After Regions’ compliance staff identified business-related electronic 

communications on a non-approved platform on personal devices, Regions conducted an internal 

investigation and self-reported the facts to the Commission staff.  Respondent proactively 

identified key documents and facts, which assisted the Commission staff in efficiently 

investigating the conduct.  Prior to contacting the Division of Enforcement, Respondent also 

undertook significant efforts to comply relating to its recordkeeping practices, policies and 

procedures, and related supervisory practices. 

4. From at least September 2019 (the “Relevant Period”), Regions personnel sent 

and received off-channel communications that were records required to be maintained under 

Exchange Act Rule 17a-4(b)(4).  Respondent did not maintain or preserve the substantial 

majority of these written communications.  Respondent’s failures were firm-wide and involved 

personnel at various levels of authority.  As a result, Respondent violated Section 17(a) of the 

Exchange Act and Rule 17a-4(b)(4) thereunder. 

5. Regions’ supervisors, who were responsible for supervising junior personnel, 

routinely communicated off-channel using their personal devices.  In fact, managers and officers 

responsible for supervising junior personnel themselves failed to comply with Regions’ policies 

and procedures by communicating, through non-approved methods, on their personal devices 

about Regions’ broker-dealer business.  

6. Regions’ widespread failure to implement a system of follow-up and review 

reasonably expected to determine whether personnel were following its policies and procedures 

that prohibit off-channel communications led to its failure to reasonably supervise its personnel 

within the meaning of Section 15(b)(4)(E) of the Exchange Act.  

7. During the time period that Regions failed to maintain and preserve off-channel 

communications that its personnel sent and received related to its broker-dealer business, 

Regions received and responded to a Commission records request in one Commission 

investigation.  As a result, Regions’ recordkeeping failures likely impacted the Commission’s 

ability to carry out its regulatory functions and investigate violations of the federal securities 

laws in that investigation.   



 

  

 

3 

8. After Regions initiated a review of its recordkeeping efforts, Regions identified 

failures and self-reported its conduct, and further enhanced its ongoing efforts to comply.  As set 

forth in the Undertakings below, Regions will retain an independent compliance consultant to 

review and assess Regions’ remedial steps relating to its recordkeeping practices, policies and 

procedures, related supervisory practices, and employment actions. 

Respondent 

9. Regions Securities LLC is a Delaware limited liability company with its 

principal office in Atlanta, Georgia and has been registered with the Commission as a broker-

dealer since July 25, 2012.  

Recordkeeping Requirements under the Exchange Act 

10. Section 17(a)(1) of the Exchange Act authorizes the Commission to issue rules 

requiring broker-dealers to make and keep for prescribed periods, and furnish copies of, such 

records as necessary or appropriate in the public interest, for the protection of investors or 

otherwise in furtherance of the purposes of the Exchange Act. 

11. The Commission adopted Rule 17a-4 under the Exchange Act pursuant to this 

authority.  Rule 17a-4 specifies the manner and length of time that the records made in 

accordance with Commission rules, and certain other records made by broker-dealers, must be 

maintained and produced promptly to Commission representatives.   

12. The rules adopted under Section 17(a)(1) of the Exchange Act, including Rule 

17a-4(b)(4), require that broker-dealers preserve for at least three years, the first two years in an 

easily accessible place, originals of all written communications received and copies of all written 

communications sent relating to the broker-dealer’s business as such.  These rules impose 

minimum recordkeeping requirements that are based on standards a prudent broker-dealer should 

follow in the normal course of business.  

13. The Commission previously has stated that these and other recordkeeping 

requirements “are an integral part of the investor protection function of the Commission, and 

other securities regulators, in that the preserved records are the primary means of monitoring 

compliance with applicable securities laws, including antifraud provisions and financial 

responsibility standards.”  Commission Guidance to Broker-Dealers on the Use of Electronic 

Storage Media under the Electronic Signatures in Global and National Commerce Act of 2000 

with Respect to Rule 17a-4(f), 17 C.F.R. Part 241, Exchange Act Rel. No. 44238 (May 1, 2001). 

Regions’ Policies and Procedures 

14. Regions maintained certain policies and procedures designed to ensure the 

retention of business-related records, including electronic communications, in compliance with 

the relevant recordkeeping provisions.   

15. Regions personnel were advised that the use of unapproved electronic 

communications methods, including on their personal devices, was not permitted, and they 

should not use personal email, chats or text messaging applications for business purposes.  



 

  

 

4 

16. Messages sent through Regions’ approved communications methods were 

monitored, subject to review, and, when appropriate, archived.  Messages sent through 

unapproved communications methods, such as text messaging, and those sent from unapproved 

applications on personal devices, were not monitored, subject to review or archived. 

17. Since at least 2018, Regions has conducted various electronic communication-

related trainings on its policies prohibiting off-channel communications for supervisors and other 

personnel.  In 2019, Regions added various electronic-communication related trainings as part of 

its associate training program.  During the Relevant Period, Regions had procedures for all 

personnel, including supervisors, requiring annual self-attestations of compliance.  

18. Regions, however, failed to implement a system reasonably expected to determine 

whether all personnel, including supervisors, were following Regions’ policies and procedures.  

While permitting personnel to use approved communications methods, including on personal 

phones, for business communications, Regions failed to implement sufficient monitoring to 

ensure that its recordkeeping and communications policies were being followed.  

Regions’ Recordkeeping Failures Across Its Brokerage Business 

19. In September 2021, the Commission staff commenced a risk-based initiative to 

investigate whether broker-dealers were properly retaining business-related messages sent and 

received on personal devices.  In June 2024, Regions voluntarily contacted the staff regarding 

certain off-channel communications that it had identified related to the business of Regions.  

Regions cooperated with the staff’s investigation by proactively gathering communications from 

the personal devices of its personnel and responding to the staff’s requests for additional 

information.  As reported to the Commission staff, Regions personnel who had engaged in the 

use of off-channel communications included senior managers and officers across the firm. 

20. Regions alerted the Commission staff to numerous off-channel communications at 

various seniority levels of Regions.  Respondent collected data from a sampling of its personnel at 

various seniority levels and found that most had engaged in at least some level of off-channel 

communications during the Relevant Period.  Overall, these personnel sent and received numerous 

off-channel communications, involving other Regions personnel and external contacts in the 

securities industry.  As disclosed to the Commission staff, within Regions, a number of senior 

leaders participated in off-channel communications. 

21. During the Relevant Period, Regions personnel sent and received off-channel 

communications that concerned its broker-dealer business.   

22. For example, in October and November 2022, Regions personnel exchanged off-

channel messages with a customer regarding the strategy and terms for a potential merger and 

acquisition transaction.  These messages related to Regions’ broker-dealer business as such. 



 

  

 

5 

Regions’ Failure to Preserve Required Records Potentially 

Compromised and Delayed a Commission Matter 

23. During the Relevant Period, Regions received and responded to a Commission 

records request in one Commission investigation.  By failing to maintain and preserve required 

records relating to its broker-dealer business, Regions likely deprived the Commission of off-

channel communications in that investigation. 

Regions’ Violations and Failure to Supervise 

24. As a result of the conduct described above, during the Relevant Period, Regions 

willfully2 violated Section 17(a) of the Exchange Act and Rule 17a-4(b)(4) thereunder.   

25. As a result of the conduct described above, during the Relevant Period, Regions 

failed reasonably to supervise its personnel with a view to preventing or detecting certain of its 

supervised persons’ aiding and abetting violations of Section 17(a) of the Exchange Act and Rule 

17a-4(b)(4) thereunder, within the meaning of Section 15(b)(4)(E) of the Exchange Act.  

Regions’ Self-Reporting, Cooperation, and Remedial Efforts 

26. In determining to accept the Offer, the Commission considered Regions’ self-

report, cooperation afforded to the Commission staff, and efforts to comply.  After identifying off-

channel communications, Respondent conducted an internal investigation and self-reported the 

facts to the Commission staff.  Prior to approaching the Commission staff, since at least January 

2019, Regions had begun enhancing its efforts to comply, which included increasing trainings, 

sending reminders that emphasized the importance of complying with recordkeeping obligations, 

updating its existing electronic communication policies and procedures, and designating principals 

who are responsible for reviewing and monitoring their associates’ electronic communications on a 

regular basis.  In early 2024, Regions began making corporate devices available to personnel, 

thereby making approved channels more readily available, updating the frequency of the 

requirement to attest to compliance with Regions’ electronic communication policies and 

procedures from an annual to a quarterly basis, and implementing a monitoring program to conduct 

supervision and surveillance of all text messages on the corporate devices.  Regions also took 

proactive steps to collect and preserve off-channel communications.   

Undertakings 

27. Prior to this action, Regions enhanced its policies and procedures, and increased 

training concerning the use of approved communications methods, and began implementing 

changes to the technology available to its personnel.  In addition, Regions undertakes to: 

 

 
2  “Willfully,” for purposes of imposing relief under Section 15(b) of the Exchange Act, 

“‘means no more than that the person charged with the duty knows what he is doing.’”  

Wonsover v. SEC, 205 F.3d 408, 414 (D.C. Cir 2000) (quoting Hughes v. SEC, 174 F.2d 969, 

977 (D.C. Cir. 1949)).  



 

  

 

6 

28. Independent Compliance Consultant. 

a.  Regions shall retain, within thirty (30) days of the entry of this Order, the 

services of an independent compliance consultant (“Compliance Consultant”) that is not 

unacceptable to the Commission staff.  The Compliance Consultant’s compensation and 

expenses shall be borne exclusively by Regions. 

 

b.  Regions will oversee the work of the Compliance Consultant. 

 

c.  Regions shall provide to the Commission staff, within sixty (60) days of the 

entry of this Order, a copy of the engagement letter detailing the Compliance 

Consultant’s responsibilities, which shall include a comprehensive compliance review as 

described below.  Regions shall require that, within ninety (90) days of the date of the 

engagement letter, the Compliance Consultant conduct: 

 

i.  A comprehensive review of Regions’ supervisory, compliance, and 

other policies and procedures designed to ensure that Regions’ electronic 

communications, including those found on personal electronic devices, including 

without limitation, cellular phones (“Personal Devices”), are preserved in 

accordance with the requirements of the federal securities laws. 

 

ii.  A comprehensive review of training conducted by Regions to ensure 

personnel are complying with the requirements regarding the preservation of 

electronic communications, including those found on Personal Devices, in 

accordance with the requirements of the federal securities laws, including by 

ensuring that Regions personnel certify in writing on a quarterly basis that they 

are complying with preservation requirements.  

 

iii.  An assessment of the surveillance program measures implemented by 

Regions to ensure compliance, on an ongoing basis, with the requirements found 

in the federal securities laws to preserve electronic communications, including 

those found on Personal Devices. 

 

iv.  An assessment of the technological solutions that Regions has begun 

implementing to meet the record retention requirements of the federal securities 

laws, including an assessment of the likelihood that Regions personnel will use 

the technological solutions going forward and a review of the measures employed 

by Regions to track personnel usage of new technological solutions.  

 

v.  An assessment of the measures used by Regions to prevent the use of 

unauthorized communications methods for business communications by its 

personnel.  This assessment should include, but not be limited to, a review of 

Regions’ policies and procedures to ascertain if they provide for any significant 

technology and/or behavioral restrictions that help prevent the risk of the use of 

unapproved communications methods on Personal Devices (e.g., trading floor 

restrictions).   



 

  

 

7 

 

vi.  A review of Regions’ electronic communications surveillance routines 

to ensure that electronic communications through approved communications 

methods found on Personal Devices are incorporated into Regions’ overall 

communications surveillance program.   

 

vii.  A comprehensive review of the framework adopted by Regions to 

address instances of non-compliance by Regions personnel with Regions’ policies 

and procedures concerning the use of Personal Devices to communicate about 

Regions’ business in the past.  This review shall include a survey of how Regions 

determined which personnel failed to comply with Regions’ policies and 

procedures, the corrective action carried out, an evaluation of who violated the 

policies and procedures and why, what penalties were imposed, and whether 

penalties were handed out consistently across business lines and seniority levels.   

 

d.  Regions shall require that, within forty-five (45) days after completion of the 

review set forth in sub-paragraphs 28.c.i. through 28.c.vii. above, the Compliance 

Consultant shall submit a detailed written report of its findings to Regions and to the 

Commission staff (the “Report”).  Regions shall require that the Report include a 

description of the review performed, the names of the individuals who performed the 

review, the conclusions reached, the Compliance Consultant’s recommendations for 

changes in or improvements to Regions’ policies and procedures, and a summary of the 

plan for implementing the recommended changes in or improvements to Regions’ 

policies and procedures. 

 

e.  Regions shall adopt all recommendations contained in the Report within ninety 

(90) days of the date of the Report; provided, however, that within forty-five (45) days 

after the date of the Report, Regions shall advise the Compliance Consultant and the 

Commission staff in writing of any recommendations that Regions considers to be unduly 

burdensome, impractical, or inappropriate.  With respect to any recommendation that 

Regions considers unduly burdensome, impractical, or inappropriate, Regions need not 

adopt such recommendation at that time, but shall propose in writing an alternative 

policy, procedure, or disclosure designed to achieve the same objective or purpose. 

 

f.  As to any recommendation concerning Regions’ policies or procedures on 

which Regions and the Compliance Consultant do not agree, Regions and the 

Compliance Consultant shall attempt in good faith to reach an agreement within sixty 

(60) days after the date of the Report.  Within fifteen (15) days after the conclusion of the 

discussion and evaluation by Regions and the Compliance Consultant, Regions shall 

require that the Compliance Consultant inform Regions and the Commission staff in 

writing of the Compliance Consultant’s final determination concerning any 

recommendation that Regions considers to be unduly burdensome, impractical, or 

inappropriate.  Regions shall abide by the determinations of the Compliance Consultant 

and, within sixty (60) days after final agreement between Regions and the Compliance 

Consultant or final determination by the Compliance Consultant, whichever occurs first, 



 

  

 

8 

Regions shall adopt and implement all of the recommendations that the Compliance 

Consultant deems appropriate. 

 

g.  Regions shall cooperate fully with the Compliance Consultant and shall 

provide the Compliance Consultant with access to such of Regions’ files, books, records, 

and personnel as are reasonably requested by the Compliance Consultant for review. 

 

h. Regions shall not have the authority to terminate the Compliance Consultant or 

substitute another compliance consultant for the initial Compliance Consultant, without 

the prior written approval of the Commission staff.  Regions shall compensate the 

Compliance Consultant and persons engaged to assist the Compliance Consultant for 

services rendered under this Order at their reasonable and customary rates. 

 

i.  For the period of engagement and for a period of two years from completion of 

the engagement, Regions shall not (i) retain the Compliance Consultant for any other 

professional services outside of the services described in this Order; (ii) enter into any 

other professional relationship with the Compliance Consultant, including any 

employment, consultant, attorney-client, auditing or other professional relationship; or 

(iii) enter, without prior written consent of the Commission staff, into any such 

professional relationship with any of the Compliance Consultant’s present or former 

affiliates, employers, directors, officers, employees, or agents. 

 

j.  The Report by the Compliance Consultant will likely include confidential 

financial, proprietary, competitive business or commercial information.  Public disclosure 

of the Report could discourage cooperation, impede pending or potential government 

investigations or undermine the objectives of the reporting requirement.  For these 

reasons, among others, the Report and the contents thereof are intended to remain and 

shall remain non-public, except (1) pursuant to court order, (2) as agreed to by the parties 

in writing, (3) to the extent that the Commission determines in its sole discretion that 

disclosure would be in furtherance of the Commission’s discharge of its duties and 

responsibilities, or (4) as otherwise required by law. 

 

29. One-Year Evaluation. Regions shall require the Compliance Consultant to assess 

Regions’ program for the preservation, as required under the federal securities laws, of electronic 

communications, including those found on Personal Devices, commencing one year after 

submitting the Report required by Paragraph 28.d above.  Regions shall require this review to 

evaluate Regions’ progress in the areas described in Paragraphs 28.c.i to 28.c.vii above.  After 

this review, Regions shall require the Compliance Consultant to submit a report (the “One Year 

Report”) to Regions and the Commission staff and shall ensure that the One Year Report 

includes an updated assessment of Regions’ policies and procedures with regard to the 

preservation of electronic communications (including those found on Personal Devices), training, 

surveillance programs, and technological solutions implemented in the prior year period.  

 



 

  

 

9 

30. Reporting Discipline Imposed.  For two (2) years following the entry of this Order, 

Regions shall notify the Commission staff as follows upon the imposition of any discipline 

imposed by Regions, including, but not limited to: written warnings; loss of any pay, bonus or 

incentive compensation; or the termination of personnel; with respect to any personnel found to 

have violated Regions’ policies and procedures concerning the preservation of electronic 

communications, including those found on Personal Devices: at least forty-eight (48) hours before 

the filing of a Form U5, or within ten (10) days of the imposition of other discipline.   

31. Internal Audit.  In addition to the Compliance Consultant’s review and issuance of 

the One Year Report, Regions will also have its Internal Audit function conduct a separate audit(s) 

to assess Regions’ progress in the areas described in Paragraphs 28.c.i to 28.c.vii above.  After 

completion of this audit(s), Regions shall ensure that Internal Audit submits a report to Regions 

and to the Commission staff. 

32. Recordkeeping.  Regions shall preserve, for a period of not less than six (6) years 

from the end of the fiscal year last used, the first two (2) years in an easily accessible place, any 

record of compliance with these undertakings.   
 

33. Deadlines.  For good cause shown, the Commission staff may extend any of the 

procedural dates relating to the undertakings.  Deadlines for procedural dates shall be counted in 

calendar days, except that if the last day falls on a weekend or federal holiday, the next business 

day shall be considered to be the last day. 

34. Certification.  Regions shall certify, in writing, compliance with the undertakings 

set forth above.  The certification shall identify the undertakings, provide written evidence of 

compliance in the form of a narrative, and be supported by exhibits sufficient to demonstrate 

compliance.  The Commission staff may make reasonable requests for further evidence of 

compliance, and Respondent agrees to provide such evidence.  The certification and supporting 

material shall be submitted to Amy S. Cotter, Assistant Director, Division of Enforcement, 

Chicago Regional Office, 175 West Jackson Boulevard, Suite 1450, Chicago, Illinois 60604, or 

such other person as the Commission staff may request, with a copy to the Office of Chief 

Counsel of the Enforcement Division, no later than sixty (60) days from the date of the 

completion of the undertakings. 

IV. 

 In view of the foregoing, the Commission deems it appropriate and in the public interest 

to impose the sanctions agreed to in Respondent’s Offer. 

 

 Accordingly, pursuant to Sections 15(b) and 21C of the Exchange Act, it is hereby 

ORDERED that: 

 

A. Respondent cease and desist from committing or causing any violations and any 

future violations of Section 17(a) of the Exchange Act and Rule 17a-4 thereunder. 

B. Respondent is censured.  

 



 

  

 

10 

C. Respondent shall comply with the undertakings enumerated in paragraphs 27 to 

34 above. 

 

D. Respondent shall, within 14 days of the entry of this Order, pay a civil money 

penalty in the amount of $750,000.00 to the Securities and Exchange Commission 

for transfer to the general fund of the United States Treasury, subject to Exchange 

Act Section 21F(g)(3).  If timely payment is not made, additional interest shall 

accrue pursuant to 31 U.S.C. § 3717.   

 

 Payment must be made in one of the following ways:   

 

(1) Respondent may transmit payment electronically to the Commission, 

which will provide detailed ACH transfer/Fedwire instructions upon 

request;  

 

(2) Respondent may make direct payment from a bank account via Pay.gov 

through the SEC website at http://www.sec.gov/about/offices/ofm.htm; or  

 

(3) Respondent may pay by certified check, bank cashier’s check, or United 

States postal money order, made payable to the Securities and Exchange 

Commission and hand-delivered or mailed to:  

 

Enterprise Services Center 

Accounts Receivable Branch 

HQ Bldg., Room 181, AMZ-341 

6500 South MacArthur Boulevard 

Oklahoma City, OK 73169 

 

Payments by check or money order must be accompanied by a cover letter identifying 

Regions as the Respondent in these proceedings, and the file number of these proceedings; a 

copy of the cover letter and check or money order must be sent to Amy S. Cotter, Assistant 

Regional Director, Division of Enforcement, Chicago Regional Office, 175 West Jackson 

Boulevard, Suite 1450, Chicago, Illinois 60604.   

 

 E. The amount ordered to be paid as a civil money penalty pursuant to this Order 

shall be treated as a penalty paid to the government for all purposes, including all tax purposes.  

To preserve the deterrent effect of the civil penalty, Respondent agrees that in any Related 

Investor Action, it shall not argue that it is entitled to, nor shall it benefit by, the offset or 

reduction of any award of compensatory damages by the amount of any part of Respondent’s 

payment of a civil penalty in this action (“Penalty Offset”).  If the court in any Related Investor 

Action grants such a Penalty Offset, Respondent agrees that it shall, within 30 days after entry of 

a final order granting the Penalty Offset, notify the Commission’s counsel in this action and pay 

the amount of the Penalty Offset to the Securities and Exchange Commission.  Such a payment 

shall not be deemed an additional civil penalty and shall not be deemed to change the amount of  

 

 



 

  

 

11 

 

 

 

 

the civil penalty imposed in this proceeding.  For purposes of this paragraph, a “Related Investor 

Action” means a private damages action brought against Respondent by or on behalf of one or 

more investors based on substantially the same facts as alleged in the Order instituted by the 

Commission in this proceeding. 

 

 By the Commission. 

 

 

 

Vanessa A. Countryman 

       Secretary 


	DB_OIP_FINAL
	UNITED_STATES_OF_AMERICA
	In_the_Matter_of
	Respondents.
	CC_requirements
	Report