SEC fines Banc of America securities $10 million.

• Author: Swartz, Nikki
• Position: Up front: news, trends & analysis - Banc of America Securities LLC - Securities and Exchange Commission

Banc of America Securities LLC, a unit of Bank of America Corp., agreed to pay a record $10 million penalty to settle the U.S. Securities and Exchange Commission's (SEC) claims that it violated recordkeeping laws and access requirements laws.

According to the SEC, $10 million is a record fine amount for a violation of this type. The Associated Press (AP) reported that the commission also censured the firm's New York-based securities arm, saying it "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."

According to the SEC complaint, during a three-year period beginning in 2001, Banc of America Securities repeatedly provided misinformation to investigators about the availability of e-mails, internal compliance reviews, and supervision records. Specifically, the SEC said the firm failed to produce an e-mail exchange relating to issues its employees knew were under investigation. The commission said the firm also failed to provide other records related to the personal trading activities of a former senior employee. According to the SEC, the violations occurred during an ongoing investigation into whether Bane of America Securities made improper trades before releasing its stock analyst reports.

The SEC said Banc of America Securities told investigators it could not reproduce e-mails sent before June 2001 without incurring unreasonable expense because it would require restoration from backup tapes. But within a week, the SEC said, the firm restored e-mails created before June 2001 for internal use in dealing with the SEC inquiry. The SEC complaint also said...