In re Santander US Capital

  
 
 
UNITED STATES OF AMERICA 
 Before the 
 SECURITIES AND EXCHANGE COMMISSION 
 
SECURITIES EXCHANGE ACT OF 1934 
Release No. 102171 / January 13, 2025 
 
ADMINISTRATIVE PROCEEDING 
File No. 3-22406 
 
 
In the Matter of 
 
Santander US Capital 
Markets 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 Santander US Capital Markets LLC (“Respondent”). 
 
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: 
 
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 
                                                 
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 
 
 
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 the failure of Respondent’s personnel, including at 
senior levels, to adhere to certain of these essential requirements and Respondent’s own policies 
and procedures.  Using their personal devices, these employees communicated both internally 
and externally by text messages and/or other unapproved written communications platforms, 
such as WhatsApp (“off-channel communications”). 
3. From at least January 2021 (the “Relevant Period”), Respondent’s personnel sent 
and received off-channel communications that related to its broker-dealer business.  Respondent 
did not maintain or preserve the substantial majority of these written communications.  
Respondent’s failure involved personnel at various levels of authority and in multiple business 
teams.  As a result, Respondent violated Section 17(a) of the Exchange Act and Rule 17a-4(b)(4) 
thereunder. 
4. Respondent’s supervisors, who were responsible for supervising junior personnel, 
routinely communicated off-channel using their personal devices.  In fact, senior executives 
responsible for supervising junior personnel themselves failed to comply with Respondent’s 
policies and procedures by communicating through non-approved methods on their personal 
devices about Respondent’s broker-dealer business. 
5. Respondent’s failure to implement its policies and procedures that prohibit such 
communications led to its failure to reasonably supervise its personnel within the meaning of 
Section 15(b)(4)(E) of the Exchange Act.    
6. The Commission staff found Respondent’s recordkeeping failures after 
commencing a risk-based initiative to investigate the use of off-channel and unpreserved 
communications at broker-dealers.  Respondent has initiated a review of its recordkeeping 
failures and begun a program of remediation.   
Respondent 
7. Respondent is a Delaware limited liability company with its principal place of 
business in New York, New York.  Since December 2009, Respondent has been registered with 
the Commission as a broker-dealer.  Respondent is an indirect subsidiary of Santander Holdings 
USA, Inc., an intermediate holding company for US businesses, and wholly owned subsidiary of 
Banco Santander, S.A., a Spain-based financial services company.    
Recordkeeping Requirements Under the Exchange Act 
8. 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. 

3 
 
 
9. 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 other Commission rules, and certain other records made by broker-dealers, must 
be maintained and produced promptly to Commission representatives.   
10. 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 communications received and copies of all 
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.  
11. 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). 
Respondent’s Policies and Procedures 
12. Respondent maintained certain policies and procedures designed to ensure the 
retention of business-related records, including electronic communications, in compliance with 
the relevant recordkeeping provisions.   
13. Respondent 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, or 
forward work-related communications to unapproved applications on their personal devices.  
14. Messages sent through firm-approved communications methods were monitored, 
subject to review, and archived.  Messages sent through unapproved communications methods, 
such as WhatsApp on personal devices, were not monitored, subject to review, or archived. 
15. Respondent conducted trainings for its personnel, which were designed to address 
the firm’s supervision of its personnel and adherence to Respondent’s books and recordkeeping 
requirements.  Supervisory policies notified personnel that electronic communications were 
subject to surveillance by Respondent.  Respondent had procedures for all personnel, including 
supervisors, requiring annual self-attestations of compliance.  
16. Respondent failed to implement a system reasonably expected to determine 
whether all personnel, including supervisors, were following the firm’s policies and procedures.  
While permitting personnel to use approved communications methods, including on personal 
phones, for business communications, Respondent failed to implement sufficient monitoring to 
ensure that its recordkeeping and communications policies were being followed.  

4 
 
 
Respondent’s Recordkeeping Failures Across Its Brokerage Business 
17. 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.   Respondent cooperated with the investigation by voluntarily 
interviewing a sampling of senior personnel and gathering and reviewing messages found on the 
individuals’ personal devices.  These personnel included senior leadership, such as senior 
executives, senior managing directors, and managing directors.    
18. The Commission staff’s investigation found off-channel communications at 
various senior levels within Respondent.  The investigation determined that nearly all its 
personnel sampled had engaged in at least some level of off-channel communications.   
19. Overall, personnel sent and received numerous off-channel communications 
involving other personnel, Respondent’s brokerage customers, and/or other participants in the 
securities industry.  Within Respondent, certain senior personnel participated in off-channel 
communications. 
20. During the Relevant Period, Respondent personnel sent and received off-channel 
messages that concerned the firm’s broker-dealer business. 
21. For example, an executive officer exchanged off-channel business-related text 
messages with at least four colleagues, three of whom were supervised by the executive officer 
and were heads of other groups.  These messages related to the broker-dealer’s business as such. 
22. In addition, a senior managing director and head of a group exchanged off-
channel business-related messages with at least 10 colleagues, five of whom were supervised by 
this managing director and head of a group; seven customers, investors, or other market 
participants; and at least five individuals at another financial firm.  These messages related to the 
broker-dealer’s business as such. 
23. Furthermore, a product specialist exchanged off-channel business-related text 
messages with at least two colleagues.  These messages related to the broker-dealer’s business as 
such. 
Respondent’s Violations and Failure to Supervise 
24. As a result of the conduct described above, Respondent 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, Respondent failed reasonably to 
supervise its personnel with a view to preventing or detecting certain of its personnel’s aiding 
                                                 
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)).  

5 
 
 
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.  
Respondent’s Efforts to Comply 
26. In determining to accept the Offer, the Commission considered Respondent’s 
cooperation as well as remedial steps that Respondent undertook both before and after being 
approached by the Commission staff.  Prior to this action, Respondent commenced an internal 
review into the possible use of off-channel communications, informed the Commission of the 
findings of the review, enhanced its policies and procedures, increased training concerning the use 
of approved communications methods, including on personal devices, and began implementing 
significant changes to the technology available to personnel. 
Undertakings 
 
Respondent has undertaken to: 
27. Internal Audit. Within two hundred seventy (270) days of the entry of this Order, 
shall require that its Internal Audit function conduct a separate audit(s) consisting of the 
following:   
 
a.  A comprehensive review of Respondent’s supervisory, compliance, and other 
policies and procedures designed to ensure that Respondent’s 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. 
 
b.  A comprehensive review of training conducted by Respondent 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 Respondent’s 
personnel certify in writing on a quarterly basis that they are complying with preservation 
requirements.  
 
c.  An assessment of the surveillance program measures implemented by 
Respondent 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. 
 
d.  An assessment of the technological solutions that Respondent has begun 
implementing to meet the record retention requirements of the federal securities laws, 
including an assessment of the likelihood that Respondent’s personnel will use the 
technological solutions going forward and a review of the measures employed by 
Respondent to track employee usage of new technological solutions.  
 

6 
 
 
e.  An assessment of the measures used by Respondent to prevent the use of 
unauthorized communications methods for business communications by personnel.  This 
assessment should include, but not be limited to, a review of Respondent’s 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).   
 
f.  A review of Respondent’s electronic communications surveillance routines to 
ensure that electronic communications through approved communications methods found 
on Personal Devices are incorporated into Respondent’s overall communications 
surveillance program.   
 
g.  A comprehensive review of the framework adopted by Respondent to address 
instances of non-compliance by Respondent’s personnel with Respondent’s policies and 
procedures concerning the use of Personal Devices to communicate about Respondent’s 
business in the past.  This review shall include a survey of how Respondent determined 
which personnel failed to comply with Respondent’s 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.  
 
28. Recordkeeping.  Respondent 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. 
 
29. Certification.  Respondent 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 Alison R. Levine, Assistant Regional Director, 
Division of Enforcement, New York Regional Office, Securities and Exchange Commission, 100 
Pearl Street, Suite 20-100, New York, NY, 10004-2616, 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: 
 

7 
 
 
 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.  
 
 C. Respondent shall, within 14 days of the entry of this Order, pay a civil money 
penalty in the amount of $4,000,000 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 
Santander US Capital Markets LLC 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 
Thomas P. Smith, Jr., Associate Regional Director, Securities and Exchange Commission, 100 
Pearl Street, Suite 20-100, New York, New York 10004-2616.   
 
 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, 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 the civil 
penalty imposed in this proceeding.  For purposes of this paragraph, a “Related Investor Action” 

8 
 
 
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. 102171 / January 13, 2025 

 

ADMINISTRATIVE PROCEEDING 

File No. 3-22406 

 

 

In the Matter of 

 

Santander US Capital 

Markets 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 Santander US Capital Markets LLC (“Respondent”). 

 

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: 

 

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 

                                                 
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 

 

 

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 the failure of Respondent’s personnel, including at 

senior levels, to adhere to certain of these essential requirements and Respondent’s own policies 

and procedures.  Using their personal devices, these employees communicated both internally 

and externally by text messages and/or other unapproved written communications platforms, 

such as WhatsApp (“off-channel communications”). 

3. From at least January 2021 (the “Relevant Period”), Respondent’s personnel sent 

and received off-channel communications that related to its broker-dealer business.  Respondent 

did not maintain or preserve the substantial majority of these written communications.  

Respondent’s failure involved personnel at various levels of authority and in multiple business 

teams.  As a result, Respondent violated Section 17(a) of the Exchange Act and Rule 17a-4(b)(4) 

thereunder. 

4. Respondent’s supervisors, who were responsible for supervising junior personnel, 

routinely communicated off-channel using their personal devices.  In fact, senior executives 

responsible for supervising junior personnel themselves failed to comply with Respondent’s 

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

devices about Respondent’s broker-dealer business. 

5. Respondent’s failure to implement its policies and procedures that prohibit such 

communications led to its failure to reasonably supervise its personnel within the meaning of 

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

6. The Commission staff found Respondent’s recordkeeping failures after 

commencing a risk-based initiative to investigate the use of off-channel and unpreserved 

communications at broker-dealers.  Respondent has initiated a review of its recordkeeping 

failures and begun a program of remediation.   

Respondent 

7. Respondent is a Delaware limited liability company with its principal place of 

business in New York, New York.  Since December 2009, Respondent has been registered with 

the Commission as a broker-dealer.  Respondent is an indirect subsidiary of Santander Holdings 

USA, Inc., an intermediate holding company for US businesses, and wholly owned subsidiary of 

Banco Santander, S.A., a Spain-based financial services company.    

Recordkeeping Requirements Under the Exchange Act 

8. 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. 



3 

 

 

9. 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 other Commission rules, and certain other records made by broker-dealers, must 

be maintained and produced promptly to Commission representatives.   

10. 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 communications received and copies of all 

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.  

11. 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). 

Respondent’s Policies and Procedures 

12. Respondent maintained certain policies and procedures designed to ensure the 

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

the relevant recordkeeping provisions.   

13. Respondent 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, or 

forward work-related communications to unapproved applications on their personal devices.  

14. Messages sent through firm-approved communications methods were monitored, 

subject to review, and archived.  Messages sent through unapproved communications methods, 

such as WhatsApp on personal devices, were not monitored, subject to review, or archived. 

15. Respondent conducted trainings for its personnel, which were designed to address 

the firm’s supervision of its personnel and adherence to Respondent’s books and recordkeeping 

requirements.  Supervisory policies notified personnel that electronic communications were 

subject to surveillance by Respondent.  Respondent had procedures for all personnel, including 

supervisors, requiring annual self-attestations of compliance.  

16. Respondent failed to implement a system reasonably expected to determine 

whether all personnel, including supervisors, were following the firm’s policies and procedures.  

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

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

ensure that its recordkeeping and communications policies were being followed.  



4 

 

 

Respondent’s Recordkeeping Failures Across Its Brokerage Business 

17. 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.   Respondent cooperated with the investigation by voluntarily 

interviewing a sampling of senior personnel and gathering and reviewing messages found on the 

individuals’ personal devices.  These personnel included senior leadership, such as senior 

executives, senior managing directors, and managing directors.    

18. The Commission staff’s investigation found off-channel communications at 

various senior levels within Respondent.  The investigation determined that nearly all its 

personnel sampled had engaged in at least some level of off-channel communications.   

19. Overall, personnel sent and received numerous off-channel communications 

involving other personnel, Respondent’s brokerage customers, and/or other participants in the 

securities industry.  Within Respondent, certain senior personnel participated in off-channel 

communications. 

20. During the Relevant Period, Respondent personnel sent and received off-channel 

messages that concerned the firm’s broker-dealer business. 

21. For example, an executive officer exchanged off-channel business-related text 

messages with at least four colleagues, three of whom were supervised by the executive officer 

and were heads of other groups.  These messages related to the broker-dealer’s business as such. 

22. In addition, a senior managing director and head of a group exchanged off-

channel business-related messages with at least 10 colleagues, five of whom were supervised by 

this managing director and head of a group; seven customers, investors, or other market 

participants; and at least five individuals at another financial firm.  These messages related to the 

broker-dealer’s business as such. 

23. Furthermore, a product specialist exchanged off-channel business-related text 

messages with at least two colleagues.  These messages related to the broker-dealer’s business as 

such. 

Respondent’s Violations and Failure to Supervise 

24. As a result of the conduct described above, Respondent 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, Respondent failed reasonably to 

supervise its personnel with a view to preventing or detecting certain of its personnel’s aiding 

                                                 
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)).  



5 

 

 

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.  

Respondent’s Efforts to Comply 

26. In determining to accept the Offer, the Commission considered Respondent’s 

cooperation as well as remedial steps that Respondent undertook both before and after being 

approached by the Commission staff.  Prior to this action, Respondent commenced an internal 

review into the possible use of off-channel communications, informed the Commission of the 

findings of the review, enhanced its policies and procedures, increased training concerning the use 

of approved communications methods, including on personal devices, and began implementing 

significant changes to the technology available to personnel. 

Undertakings 

 

Respondent has undertaken to: 

27. Internal Audit. Within two hundred seventy (270) days of the entry of this Order, 

shall require that its Internal Audit function conduct a separate audit(s) consisting of the 

following:   

 

a.  A comprehensive review of Respondent’s supervisory, compliance, and other 

policies and procedures designed to ensure that Respondent’s 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. 

 

b.  A comprehensive review of training conducted by Respondent 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 Respondent’s 

personnel certify in writing on a quarterly basis that they are complying with preservation 

requirements.  

 

c.  An assessment of the surveillance program measures implemented by 

Respondent 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. 

 

d.  An assessment of the technological solutions that Respondent has begun 

implementing to meet the record retention requirements of the federal securities laws, 

including an assessment of the likelihood that Respondent’s personnel will use the 

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

Respondent to track employee usage of new technological solutions.  

 



6 

 

 

e.  An assessment of the measures used by Respondent to prevent the use of 

unauthorized communications methods for business communications by personnel.  This 

assessment should include, but not be limited to, a review of Respondent’s 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).   

 

f.  A review of Respondent’s electronic communications surveillance routines to 

ensure that electronic communications through approved communications methods found 

on Personal Devices are incorporated into Respondent’s overall communications 

surveillance program.   

 

g.  A comprehensive review of the framework adopted by Respondent to address 

instances of non-compliance by Respondent’s personnel with Respondent’s policies and 

procedures concerning the use of Personal Devices to communicate about Respondent’s 

business in the past.  This review shall include a survey of how Respondent determined 

which personnel failed to comply with Respondent’s 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.  

 

28. Recordkeeping.  Respondent 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. 

 

29. Certification.  Respondent 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 Alison R. Levine, Assistant Regional Director, 

Division of Enforcement, New York Regional Office, Securities and Exchange Commission, 100 

Pearl Street, Suite 20-100, New York, NY, 10004-2616, 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: 

 



7 

 

 

 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.  

 

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

penalty in the amount of $4,000,000 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 

Santander US Capital Markets LLC 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 

Thomas P. Smith, Jr., Associate Regional Director, Securities and Exchange Commission, 100 

Pearl Street, Suite 20-100, New York, New York 10004-2616.   

 

 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, 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 the civil 

penalty imposed in this proceeding.  For purposes of this paragraph, a “Related Investor Action” 



8 

 

 

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
	I.
	II.
	III.
	Summary
	Respondent
	Recordkeeping Requirements Under the Exchange Act
	Respondent’s Policies and Procedures
	Respondent’s Recordkeeping Failures Across Its Brokerage Business
	17. 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.   Respondent cooperated with the investigation...
	Respondent’s Violations and Failure to Supervise
	Respondent’s Efforts to Comply

	IV.