In re Invesco Distributors

 
 
UNITED STATES OF AMERICA 
 Before the 
 SECURITIES AND EXCHANGE COMMISSION 
 
SECURITIES EXCHANGE ACT OF 1934 
Release No. 101141 / September 24, 2024 
 
INVESTMENT ADVISERS ACT OF 1940 
Release No. 6721 / September 24, 2024 
 
ADMINISTRATIVE PROCEEDING 
File No. 3-22165 
 
 
In the Matter of 
 
Invesco Distributors, Inc. and 
Invesco Advisers, Inc., 
 
Respondents. 
ORDER INSTITUTING 
ADMINISTRATIVE AND CEASE-
AND-DESIST PROCEEDINGS, 
PURSUANT TO SECTIONS 15(b) AND 
21C OF THE SECURITIES 
EXCHANGE ACT OF 1934 AND 
SECTIONS 203(e) AND 203(k) OF THE 
INVESTMENT ADVISERS ACT OF 
1940, 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 Invesco Distributors, Inc. (“IDI”), and pursuant to Sections 203(e) and 
203(k) of the Investment Advisers Act of 1940 (“Advisers Act”) against Invesco Advisers, Inc. 
(“IAI,” and with IDI, “Respondents” or “Invesco”). 
 
II. 
 In anticipation of the institution of these proceedings, Respondents have submitted Offers 
of Settlement (“Offers”) that the Commission has determined to accept.  Respondents admit the 
facts set forth in Section III below, acknowledge that their conduct violated the federal securities 
laws, admit the Commission’s jurisdiction over them and the subject matter of these proceedings, 
and consent 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 and 
Sections 203(e) and 203(k) of the Investment Advisers Act of 1940, Making Findings, and 
Imposing Remedial Sanctions and a Cease-and-Desist Order (“Order”), as set forth below.   
 

 
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III. 
 On the basis of this Order and Respondents’ Offers, the Commission finds
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 that: 
 
Summary 
1. The federal securities laws impose recordkeeping requirements on broker-dealers 
and registered investment advisers 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 the widespread and longstanding failure of 
Respondents’ personnel, including at senior levels, to adhere to certain of these essential 
requirements and Respondents’ 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 2020 (the “Relevant Period”), IDI personnel sent and 
received off-channel communications that related to the business of the broker-dealer.  
Additionally, during the Relevant Period, IAI personnel sent and received off-channel 
communications related to recommendations made or proposed to be made and advice given or 
proposed to be given in their advisory business.  Respondents did not maintain or preserve the 
substantial majority of these written communications.  Respondents’ failure was firm-wide and 
involved personnel at various levels of authority.  As a result, IDI violated Section 17(a) of the 
Exchange Act and Rule 17a-4(b)(4) thereunder, and IAI violated Section 204 of the Advisers Act 
and Rule 204-2(a)(7) thereunder.  
4. Respondents’ supervisors, who were responsible for supervising junior personnel, 
routinely communicated off-channel using their personal devices.  In fact, senior personnel 
responsible for supervising junior personnel themselves failed to comply with Respondents’ 
policies and procedures by communicating through non-approved methods on their personal 
devices about Respondents’ broker-dealer business or investment adviser business, as applicable. 
5. Respondents’ widespread failure to implement their policies and procedures that 
prohibit such communications led to their failure to reasonably supervise their personnel within 
the meaning of Section 15(b)(4)(E) of the Exchange Act as to IDI, and Section 203(e)(6) of the 
Advisers Act as to IAI.   
6. During the Relevant Period, IAI received and responded to Commission 
subpoenas for documents and records requests in various Commission investigations.  As a 
result, IAI’s recordkeeping failures likely impacted the Commission’s ability to carry out its 
 
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  The findings herein are made pursuant to Respondents’ Offers of Settlement and are not 
binding on any other person or entity in this or any other proceeding.  

 
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regulatory functions and investigate violations of the federal securities laws across these 
investigations. 
7. The Commission staff uncovered Respondents’ misconduct after commencing 
risk-based initiatives to investigate the use of off-channel and unpreserved communications at 
broker-dealers and registered investment advisers.  Respondents have initiated a review of their 
recordkeeping failures and begun a program of remediation.  As set forth in the Undertakings 
below, Respondents will retain an independent compliance consultant to review and assess 
Respondents’ remedial steps relating to their recordkeeping practices, policies and procedures, 
related supervisory practices, and employment actions. 
Respondents 
8. Invesco Distributors, Inc. is a Delaware corporation with its principal office in 
Houston, Texas and has been registered with the Commission as a broker-dealer since 1977.  It 
was registered with the Commission as an investment adviser from 2006 to 2009.  It is an indirect, 
wholly-owned subsidiary of Invesco Ltd. 
9. Invesco Advisers, Inc. is a Delaware corporation with its principal office in 
Atlanta, Georgia and has been registered with the Commission as an investment adviser since 
1988.  It is an indirect, wholly-owned subsidiary of Invesco Ltd. 
Recordkeeping Requirements Under the Exchange Act and Advisers Act 
10. Section 17(a)(1) of the Exchange Act and Section 204 of the Advisers Act 
authorize the Commission to issue rules requiring, respectively, broker-dealers and investment 
advisers 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, with respect to 
the Exchange Act, otherwise in furtherance of the purposes of the Exchange Act.  
 
11. The Commission adopted Rule 17a-4 under the Exchange Act and Rule 204-2 
under the Advisers Act pursuant to this authority.  These rules specify the manner and length of 
time that the records made in accordance with Commission rules, and certain other records made 
by broker-dealers or investment advisers, 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 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.  
 
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 

 
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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). 
14. The rules adopted under Section 204 of the Advisers Act, including Rule 204- 
2(a)(7), require that investment advisers preserve for at least five years in an easily accessible 
place, the first two years in an appropriate office of the investment adviser, originals of all 
written communications received and copies of all written communications sent relating to, 
among other things: (a) any recommendation made or proposed to be made and any advice given 
or proposed to be given; (b) any receipt, disbursement or delivery of funds or securities; (c) the 
placing or execution of any order to purchase or sell any security; or (d) predecessor performance 
and the performance or rate of return of any or all managed accounts, portfolios, or securities 
recommendations. 
 
Respondents’ Policies and Procedures 
15. Respondents maintained certain policies and procedures designed to ensure the 
retention of business-related records, including electronic communications, in compliance with 
the relevant recordkeeping provisions.   
16. Respondents’ 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 on personal devices for 
business purposes, or forward work-related communications to unapproved applications on their 
personal devices.  
17. Messages sent through firm-approved communications methods were monitored, 
subject to review, and archived.  Messages sent through unapproved communications methods, 
such as WhatsApp and other unapproved applications on personal devices, were not monitored, 
subject to review or archived. 
18. Respondents conducted training for their personnel, which was designed to 
address Respondents’ supervision of their personnel and adherence to the books and 
recordkeeping requirements.  Respondents also required annual attestations from their personnel 
of compliance with these policies and procedures regarding electronic communications.  
19. Respondents failed to implement a system reasonably expected to determine 
whether all personnel, including supervisors, were following Respondents’ policies and 
procedures.  While permitting personnel to use approved communications methods, including on 
personal phones, for business communications, Respondents failed to implement sufficient 
monitoring to ensure that their recordkeeping and communications policies were being followed. 
Respondents’ Recordkeeping Failures Across the Brokerage and Investment Advisory 
Businesses 
20. In September 2021, the Commission staff commenced a risk-based initiative to 
investigate whether registrants were properly retaining business-related messages sent and 

 
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received on personal devices.  Respondents cooperated with the investigation by voluntarily 
interviewing a sampling of personnel from IDI and IAI, and gathering and reviewing messages 
found on the individuals’ personal devices.  These personnel included senior personnel, such as 
distribution leaders, desk heads, and investment team leadership and managers. 
21. The Commission staff’s investigation uncovered pervasive off-channel 
communications by personnel at various levels of authority within IDI and IAI.  The 
investigation determined that nearly all broker-dealer and investment adviser personnel sampled 
had engaged in at least some level of off-channel communications.   
22. Overall, personnel sent and received numerous off-channel communications 
involving other Invesco personnel, as well as external participants in the securities industry.  
Within IDI and IAI, distribution leaders, desk heads, and investment team leadership and 
managers participated in off-channel communications. 
23. During the Relevant Period, IDI personnel sent and received off-channel 
messages that concerned its broker-dealer business. 
24. For example, a senior employee of IDI’s distribution team exchanged multiple 
text messages with several Invesco colleagues concerning strategy regarding platform 
partnerships.  As another example, this senior employee exchanged multiple text messages with 
personnel at other financial services firms concerning the operations of certain alternatives 
products.  These messages related to the broker-dealer’s business as such. 
25. In addition, a senior employee who is a registered representative of IDI exchanged 
text messages with another senior Invesco colleague and an employee of another financial services 
firm concerning Invesco’s unit investment trust business.  These messages related to the broker-
dealer’s business as such.  
26. During the Relevant Period, IAI personnel sent and received off-channel text 
messages subject to the recordkeeping requirements of Advisers Act Rule 204-2.  
27. For example, a senior member of IAI’s Global Liquidity team exchanged multiple 
text messages with several IAI colleagues and personnel at other financial services firms 
discussing certain issues related to, among other things, previously executed securities trades for 
the account of advisory clients. 
 
28. In addition, a senior employee at IAI exchanged multiple off-channel text messages 
with IAI colleagues, including other senior employees as well as a more junior employee, related 
to, among other things, the potential impact of macroeconomic and regulatory developments on 
certain client funds’ holdings and investment advice proposed to be given as a result. 
 
IAI’s Failure to Preserve Required Records Potentially 
Compromised and Delayed Commission Matters 
29. During the Relevant Period, IAI received and responded to Commission 
subpoenas for documents and records requests in various Commission investigations.  By failing 

 
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to maintain and preserve required records relating to its business, IAI likely deprived the 
Commission of these off-channel communications in various investigations. 
 
Respondents’ Violations and Failure to Supervise 
30. As a result of the conduct described above, IDI willfully
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 violated Section 17(a) of 
the Exchange Act and Rule 17a-4(b)(4) thereunder.   
 
31. As a result of the conduct described above, IDI 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.  
 
32. As a result of the conduct described above, IAI willfully violated Section 204 of the 
Advisers Act and Rule 204-2(a)(7) thereunder. 
 
33. As a result of the conduct described above, IAI failed reasonably to supervise its 
personnel with a view to preventing or detecting certain of its supervised persons’ aiding and 
abetting violations of Section 204 of the Advisers Act and Rule 204-2(a)(7) thereunder, within 
the meaning of Section 203(e)(6) of the Advisers Act. 
 
Respondents’ Efforts to Comply 
34. In determining to accept the Offers, the Commission considered steps promptly 
undertaken and cooperation afforded the Commission staff by Respondents.  During the entirety of 
the Relevant Period, Respondents provided certain personnel with firm-issued devices that 
included technology that enabled the capture, retention, and archiving of communications 
(including text messages) sent and received on those devices through firm-approved applications.  
Prior to this action, Respondents enhanced their policies and procedures and increased training 
concerning the use of approved communications methods and began implementing significant 
changes to the technology available to personnel. 
 
Undertakings 
Respondents have undertaken to: 
 
35. Independent Compliance Consultant. 
a.  Respondents shall retain, within thirty (30) days of the entry of this Order, the 
services of an independent compliance consultant (“Compliance Consultant”) that is not 
 
2
  “Willfully,” for purposes of imposing relief under Section 15(b) of the Exchange Act and 
Section 203(e) of the Advisers Act, “‘means no more than that the person charged with the duty 
knows what he is doing.’”  See 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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unacceptable to the Commission staff.  The Compliance Consultant’s compensation and 
expenses shall be borne exclusively by Respondents. 
 
b.  Respondents will oversee the work of the Compliance Consultant. 
 
c.  Respondents 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.  Respondents shall require that, within ninety (90) days of the date of 
the engagement letter, the Compliance Consultant conduct: 
 
i.  A comprehensive review of Respondents’ supervisory, compliance, and 
other policies and procedures designed to ensure that Respondents’ 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 Respondents 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 Respondents’ 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 
Respondents 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 Respondents have 
begun implementing to meet the record retention requirements of the federal 
securities laws, including an assessment of the likelihood that Respondents’ 
personnel will use the technological solutions going forward and a review of the 
measures employed by Respondents to track employee usage of new 
technological solutions.  
 
v.  An assessment of the measures used by Respondents 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 
Respondents’ 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).   
 
vi.  A review of Respondents’ electronic communications surveillance 
routines to ensure that electronic communications through approved 

 
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communications methods found on Personal Devices are incorporated into 
Respondents’ overall communications surveillance program.   
 
vii.  A comprehensive review of the framework adopted by Respondents 
to address instances of non-compliance by Respondents’ personnel with 
Respondents’ policies and procedures concerning the use of Personal Devices to 
communicate about firm business in the past.  This review shall include a survey 
of how Respondents determined which personnel failed to comply with 
Respondents’ 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.  Respondents shall require that, within forty-five (45) days after completion of 
the review set forth in sub-paragraphs 35.c.i. through c.vii. above, the Compliance 
Consultant shall submit a detailed written report of its findings to Respondents and to the 
Commission staff (the “Report”).  Respondents 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 Respondents’ policies and procedures, and a summary of 
the plan for implementing the recommended changes in or improvements to 
Respondents’ policies and procedures. 
 
e.  Respondents 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, Respondents shall advise the Compliance Consultant 
and the Commission staff in writing of any recommendations that Respondents consider 
to be unduly burdensome, impractical, or inappropriate.  With respect to any 
recommendation that Respondents consider unduly burdensome, impractical, or 
inappropriate, Respondents 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 Respondents’ policies or procedures on 
which Respondents and the Compliance Consultant do not agree, Respondents 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 Respondents and the Compliance Consultant, Respondents 
shall require that the Compliance Consultant inform Respondents and the Commission 
staff in writing of the Compliance Consultant’s final determination concerning any 
recommendation that Respondents consider to be unduly burdensome, impractical, or 
inappropriate.  Respondents shall abide by the determinations of the Compliance 
Consultant and, within sixty (60) days after final agreement between Respondents and the 
Compliance Consultant or final determination by the Compliance Consultant, whichever 
occurs first, Respondents shall adopt and implement all of the recommendations that the 
Compliance Consultant deems appropriate. 

 
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g.  Respondents shall cooperate fully with the Compliance Consultant and shall 
provide the Compliance Consultant with access to such of Respondents’ files, books, 
records, and personnel as are reasonably requested by the Compliance Consultant for 
review. 
 
h.  Respondents 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.  Respondents 
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 (2) years from 
completion of the engagement, Respondents 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. 
 
36. One-Year Evaluation.  Respondents shall each require the Compliance Consultant 
to assess Respondents’ respective programs 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 35.d above.  
Respondents shall require this review to evaluate Respondents’ progress in the areas described in 
Paragraphs 35.c.i-vii above.  After this review, Respondents shall require the Compliance 
Consultant to submit a report (the “One Year Report”) to Respondents and the Commission staff 
and shall ensure that the One Year Report includes an updated assessment of Respondents’ 
respective 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.  
37. Reporting Discipline Imposed.  For two (2) years following the entry of this Order, 
Respondents shall notify the Commission staff as follows upon the imposition of any discipline 

 
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imposed by Respondents, including, but not limited to: written warnings; loss of any pay, bonus, 
or incentive compensation; or the termination of personnel; with respect to any employee found to 
have violated Respondents’ respective 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.   
38. Internal Audit.  In addition to the Compliance Consultant’s review and issuance of 
the One Year Report, Respondents will also have their Internal Audit function conduct a separate 
audit(s) to assess Respondents’ progress in the areas described in Paragraphs 35.c.i-vii above.  
After completion of this audit(s), Respondents shall ensure that Internal Audit submits a report to 
Respondents and to the Commission staff. 
39. Recordkeeping.  IDI shall preserve, for a period of not less than six (6) years from 
the end of the fiscal year in which the undertakings were completed, the first two (2) years in an 
easily accessible place, any record of compliance with these undertakings.  IAI shall preserve 
any record of compliance with these undertakings in an easily accessible place for a period of not 
less than five (5) years from the end of the fiscal year during which the last entry was made on 
such record, the first two (2) years in an appropriate office of IAI. 
40. 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. 
41. Certification.  Respondents 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 Respondents agree to provide such evidence.  The certification and 
supporting material shall be submitted to Nikolay V. Vydashenko, Assistant Regional Director, 
Division of Enforcement, Fort Worth Regional Office, Securities and Exchange Commission, 
801 Cherry Street, Suite 1900, Fort Worth, TX 76102, 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 Respondents’ Offers. 
 
 Accordingly, pursuant to Sections 15(b) and 21C of the Exchange Act as to IDI, and 
pursuant to Sections 203(e) and 203(k) of the Advisers Act as to IAI, it is hereby ORDERED 
that: 
 
A. IDI 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. 
 

 
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B. IAI cease and desist from committing or causing any violations  
and any future violations of Section 204 of the Advisers Act and Rule 204-2 thereunder. 
 
C. Respondents are censured.  
 
D. Respondents shall comply with the undertakings enumerated in paragraphs 35 to 
41 above. 
  
 E. Respondents, jointly and severally, shall, within 14 days of the entry of this 
Order, pay a civil money penalty in the amount of $35,000,000 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) Respondents may transmit payment electronically to the Commission, 
which will provide detailed ACH transfer/Fedwire instructions upon 
request;  
 
(2) Respondents 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) Respondents 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 
IDI and IAI as the Respondents 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 Andrew Dean, Co-Chief, 
Asset Management Unit, Securities and Exchange Commission, 100 Pearl Street, Suite 20-100, 
New York, New York 10004-2616.   
 
 F. 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, Respondents agree that in any Related 
Investor Action, they shall not argue that they are entitled to, nor shall they benefit by, offset or 
reduction of any award of compensatory damages by the amount of any part of Respondents’ 
payment of a civil penalty in this action (“Penalty Offset”).  If the court in any Related Investor 
Action grants such a Penalty Offset, Respondents agree that they shall, within 30 days after entry 

 
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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” means a private damages action brought against Respondents 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. 101141 / September 24, 2024 

 

INVESTMENT ADVISERS ACT OF 1940 

Release No. 6721 / September 24, 2024 

 

ADMINISTRATIVE PROCEEDING 

File No. 3-22165 

 

 

In the Matter of 

 

Invesco Distributors, Inc. and 

Invesco Advisers, Inc., 

 

Respondents. 

ORDER INSTITUTING 

ADMINISTRATIVE AND CEASE-

AND-DESIST PROCEEDINGS, 

PURSUANT TO SECTIONS 15(b) AND 

21C OF THE SECURITIES 

EXCHANGE ACT OF 1934 AND 

SECTIONS 203(e) AND 203(k) OF THE 

INVESTMENT ADVISERS ACT OF 

1940, 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 Invesco Distributors, Inc. (“IDI”), and pursuant to Sections 203(e) and 

203(k) of the Investment Advisers Act of 1940 (“Advisers Act”) against Invesco Advisers, Inc. 

(“IAI,” and with IDI, “Respondents” or “Invesco”). 

 

II. 

 In anticipation of the institution of these proceedings, Respondents have submitted Offers 

of Settlement (“Offers”) that the Commission has determined to accept.  Respondents admit the 

facts set forth in Section III below, acknowledge that their conduct violated the federal securities 

laws, admit the Commission’s jurisdiction over them and the subject matter of these proceedings, 

and consent 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 and 

Sections 203(e) and 203(k) of the Investment Advisers Act of 1940, Making Findings, and 

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

 



 

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III. 

 On the basis of this Order and Respondents’ Offers, the Commission finds1 that: 

 

Summary 

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

and registered investment advisers 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 the widespread and longstanding failure of 

Respondents’ personnel, including at senior levels, to adhere to certain of these essential 

requirements and Respondents’ 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 2020 (the “Relevant Period”), IDI personnel sent and 

received off-channel communications that related to the business of the broker-dealer.  

Additionally, during the Relevant Period, IAI personnel sent and received off-channel 

communications related to recommendations made or proposed to be made and advice given or 

proposed to be given in their advisory business.  Respondents did not maintain or preserve the 

substantial majority of these written communications.  Respondents’ failure was firm-wide and 

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

Exchange Act and Rule 17a-4(b)(4) thereunder, and IAI violated Section 204 of the Advisers Act 

and Rule 204-2(a)(7) thereunder.  

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

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

responsible for supervising junior personnel themselves failed to comply with Respondents’ 

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

devices about Respondents’ broker-dealer business or investment adviser business, as applicable. 

5. Respondents’ widespread failure to implement their policies and procedures that 

prohibit such communications led to their failure to reasonably supervise their personnel within 

the meaning of Section 15(b)(4)(E) of the Exchange Act as to IDI, and Section 203(e)(6) of the 

Advisers Act as to IAI.   

6. During the Relevant Period, IAI received and responded to Commission 

subpoenas for documents and records requests in various Commission investigations.  As a 

result, IAI’s recordkeeping failures likely impacted the Commission’s ability to carry out its 

 
1  The findings herein are made pursuant to Respondents’ Offers of Settlement and are not 

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



 

3 

regulatory functions and investigate violations of the federal securities laws across these 

investigations. 

7. The Commission staff uncovered Respondents’ misconduct after commencing 

risk-based initiatives to investigate the use of off-channel and unpreserved communications at 

broker-dealers and registered investment advisers.  Respondents have initiated a review of their 

recordkeeping failures and begun a program of remediation.  As set forth in the Undertakings 

below, Respondents will retain an independent compliance consultant to review and assess 

Respondents’ remedial steps relating to their recordkeeping practices, policies and procedures, 

related supervisory practices, and employment actions. 

Respondents 

8. Invesco Distributors, Inc. is a Delaware corporation with its principal office in 

Houston, Texas and has been registered with the Commission as a broker-dealer since 1977.  It 

was registered with the Commission as an investment adviser from 2006 to 2009.  It is an indirect, 

wholly-owned subsidiary of Invesco Ltd. 

9. Invesco Advisers, Inc. is a Delaware corporation with its principal office in 

Atlanta, Georgia and has been registered with the Commission as an investment adviser since 

1988.  It is an indirect, wholly-owned subsidiary of Invesco Ltd. 

Recordkeeping Requirements Under the Exchange Act and Advisers Act 

10. Section 17(a)(1) of the Exchange Act and Section 204 of the Advisers Act 

authorize the Commission to issue rules requiring, respectively, broker-dealers and investment 

advisers 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, with respect to 

the Exchange Act, otherwise in furtherance of the purposes of the Exchange Act.  

 

11. The Commission adopted Rule 17a-4 under the Exchange Act and Rule 204-2 

under the Advisers Act pursuant to this authority.  These rules specify the manner and length of 

time that the records made in accordance with Commission rules, and certain other records made 

by broker-dealers or investment advisers, 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 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.  

 

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 



 

4 

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). 

14. The rules adopted under Section 204 of the Advisers Act, including Rule 204- 

2(a)(7), require that investment advisers preserve for at least five years in an easily accessible 

place, the first two years in an appropriate office of the investment adviser, originals of all 

written communications received and copies of all written communications sent relating to, 

among other things: (a) any recommendation made or proposed to be made and any advice given 

or proposed to be given; (b) any receipt, disbursement or delivery of funds or securities; (c) the 

placing or execution of any order to purchase or sell any security; or (d) predecessor performance 

and the performance or rate of return of any or all managed accounts, portfolios, or securities 

recommendations. 

 

Respondents’ Policies and Procedures 

15. Respondents maintained certain policies and procedures designed to ensure the 

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

the relevant recordkeeping provisions.   

16. Respondents’ 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 on personal devices for 

business purposes, or forward work-related communications to unapproved applications on their 

personal devices.  

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

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

such as WhatsApp and other unapproved applications on personal devices, were not monitored, 

subject to review or archived. 

18. Respondents conducted training for their personnel, which was designed to 

address Respondents’ supervision of their personnel and adherence to the books and 

recordkeeping requirements.  Respondents also required annual attestations from their personnel 

of compliance with these policies and procedures regarding electronic communications.  

19. Respondents failed to implement a system reasonably expected to determine 

whether all personnel, including supervisors, were following Respondents’ policies and 

procedures.  While permitting personnel to use approved communications methods, including on 

personal phones, for business communications, Respondents failed to implement sufficient 

monitoring to ensure that their recordkeeping and communications policies were being followed. 

Respondents’ Recordkeeping Failures Across the Brokerage and Investment Advisory 

Businesses 

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

investigate whether registrants were properly retaining business-related messages sent and 



 

5 

received on personal devices.  Respondents cooperated with the investigation by voluntarily 

interviewing a sampling of personnel from IDI and IAI, and gathering and reviewing messages 

found on the individuals’ personal devices.  These personnel included senior personnel, such as 

distribution leaders, desk heads, and investment team leadership and managers. 

21. The Commission staff’s investigation uncovered pervasive off-channel 

communications by personnel at various levels of authority within IDI and IAI.  The 

investigation determined that nearly all broker-dealer and investment adviser personnel sampled 

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

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

involving other Invesco personnel, as well as external participants in the securities industry.  

Within IDI and IAI, distribution leaders, desk heads, and investment team leadership and 

managers participated in off-channel communications. 

23. During the Relevant Period, IDI personnel sent and received off-channel 

messages that concerned its broker-dealer business. 

24. For example, a senior employee of IDI’s distribution team exchanged multiple 

text messages with several Invesco colleagues concerning strategy regarding platform 

partnerships.  As another example, this senior employee exchanged multiple text messages with 

personnel at other financial services firms concerning the operations of certain alternatives 

products.  These messages related to the broker-dealer’s business as such. 

25. In addition, a senior employee who is a registered representative of IDI exchanged 

text messages with another senior Invesco colleague and an employee of another financial services 

firm concerning Invesco’s unit investment trust business.  These messages related to the broker-

dealer’s business as such.  

26. During the Relevant Period, IAI personnel sent and received off-channel text 

messages subject to the recordkeeping requirements of Advisers Act Rule 204-2.  

27. For example, a senior member of IAI’s Global Liquidity team exchanged multiple 

text messages with several IAI colleagues and personnel at other financial services firms 

discussing certain issues related to, among other things, previously executed securities trades for 

the account of advisory clients. 

 

28. In addition, a senior employee at IAI exchanged multiple off-channel text messages 

with IAI colleagues, including other senior employees as well as a more junior employee, related 

to, among other things, the potential impact of macroeconomic and regulatory developments on 

certain client funds’ holdings and investment advice proposed to be given as a result. 

 

IAI’s Failure to Preserve Required Records Potentially 

Compromised and Delayed Commission Matters 

29. During the Relevant Period, IAI received and responded to Commission 

subpoenas for documents and records requests in various Commission investigations.  By failing 



 

6 

to maintain and preserve required records relating to its business, IAI likely deprived the 

Commission of these off-channel communications in various investigations. 

 

Respondents’ Violations and Failure to Supervise 

30. As a result of the conduct described above, IDI willfully2 violated Section 17(a) of 

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

 

31. As a result of the conduct described above, IDI 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.  

 

32. As a result of the conduct described above, IAI willfully violated Section 204 of the 

Advisers Act and Rule 204-2(a)(7) thereunder. 

 

33. As a result of the conduct described above, IAI failed reasonably to supervise its 

personnel with a view to preventing or detecting certain of its supervised persons’ aiding and 

abetting violations of Section 204 of the Advisers Act and Rule 204-2(a)(7) thereunder, within 

the meaning of Section 203(e)(6) of the Advisers Act. 

 

Respondents’ Efforts to Comply 

34. In determining to accept the Offers, the Commission considered steps promptly 

undertaken and cooperation afforded the Commission staff by Respondents.  During the entirety of 

the Relevant Period, Respondents provided certain personnel with firm-issued devices that 

included technology that enabled the capture, retention, and archiving of communications 

(including text messages) sent and received on those devices through firm-approved applications.  

Prior to this action, Respondents enhanced their policies and procedures and increased training 

concerning the use of approved communications methods and began implementing significant 

changes to the technology available to personnel. 

 

Undertakings 

Respondents have undertaken to: 

 

35. Independent Compliance Consultant. 

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

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

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

Section 203(e) of the Advisers Act, “‘means no more than that the person charged with the duty 

knows what he is doing.’”  See 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)).   



 

7 

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

expenses shall be borne exclusively by Respondents. 

 

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

 

c.  Respondents 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.  Respondents shall require that, within ninety (90) days of the date of 

the engagement letter, the Compliance Consultant conduct: 

 

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

other policies and procedures designed to ensure that Respondents’ 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 Respondents 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 Respondents’ 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 

Respondents 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 Respondents have 

begun implementing to meet the record retention requirements of the federal 

securities laws, including an assessment of the likelihood that Respondents’ 

personnel will use the technological solutions going forward and a review of the 

measures employed by Respondents to track employee usage of new 

technological solutions.  

 

v.  An assessment of the measures used by Respondents 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 

Respondents’ 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).   

 

vi.  A review of Respondents’ electronic communications surveillance 

routines to ensure that electronic communications through approved 



 

8 

communications methods found on Personal Devices are incorporated into 

Respondents’ overall communications surveillance program.   

 

vii.  A comprehensive review of the framework adopted by Respondents 

to address instances of non-compliance by Respondents’ personnel with 

Respondents’ policies and procedures concerning the use of Personal Devices to 

communicate about firm business in the past.  This review shall include a survey 

of how Respondents determined which personnel failed to comply with 

Respondents’ 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.  Respondents shall require that, within forty-five (45) days after completion of 

the review set forth in sub-paragraphs 35.c.i. through c.vii. above, the Compliance 

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

Commission staff (the “Report”).  Respondents 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 Respondents’ policies and procedures, and a summary of 

the plan for implementing the recommended changes in or improvements to 

Respondents’ policies and procedures. 

 

e.  Respondents 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, Respondents shall advise the Compliance Consultant 

and the Commission staff in writing of any recommendations that Respondents consider 

to be unduly burdensome, impractical, or inappropriate.  With respect to any 

recommendation that Respondents consider unduly burdensome, impractical, or 

inappropriate, Respondents 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 Respondents’ policies or procedures on 

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

shall require that the Compliance Consultant inform Respondents and the Commission 

staff in writing of the Compliance Consultant’s final determination concerning any 

recommendation that Respondents consider to be unduly burdensome, impractical, or 

inappropriate.  Respondents shall abide by the determinations of the Compliance 

Consultant and, within sixty (60) days after final agreement between Respondents and the 

Compliance Consultant or final determination by the Compliance Consultant, whichever 

occurs first, Respondents shall adopt and implement all of the recommendations that the 

Compliance Consultant deems appropriate. 



 

9 

 

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

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

records, and personnel as are reasonably requested by the Compliance Consultant for 

review. 

 

h.  Respondents 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.  Respondents 

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 (2) years from 

completion of the engagement, Respondents 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. 

 

36. One-Year Evaluation.  Respondents shall each require the Compliance Consultant 

to assess Respondents’ respective programs 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 35.d above.  

Respondents shall require this review to evaluate Respondents’ progress in the areas described in 

Paragraphs 35.c.i-vii above.  After this review, Respondents shall require the Compliance 

Consultant to submit a report (the “One Year Report”) to Respondents and the Commission staff 

and shall ensure that the One Year Report includes an updated assessment of Respondents’ 

respective 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.  

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

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



 

10 

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

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

have violated Respondents’ respective 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.   

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

the One Year Report, Respondents will also have their Internal Audit function conduct a separate 

audit(s) to assess Respondents’ progress in the areas described in Paragraphs 35.c.i-vii above.  

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

Respondents and to the Commission staff. 

39. Recordkeeping.  IDI shall preserve, for a period of not less than six (6) years from 

the end of the fiscal year in which the undertakings were completed, the first two (2) years in an 

easily accessible place, any record of compliance with these undertakings.  IAI shall preserve 

any record of compliance with these undertakings in an easily accessible place for a period of not 

less than five (5) years from the end of the fiscal year during which the last entry was made on 

such record, the first two (2) years in an appropriate office of IAI. 

40. 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. 

41. Certification.  Respondents 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 Respondents agree to provide such evidence.  The certification and 

supporting material shall be submitted to Nikolay V. Vydashenko, Assistant Regional Director, 

Division of Enforcement, Fort Worth Regional Office, Securities and Exchange Commission, 

801 Cherry Street, Suite 1900, Fort Worth, TX 76102, 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 Respondents’ Offers. 

 

 Accordingly, pursuant to Sections 15(b) and 21C of the Exchange Act as to IDI, and 

pursuant to Sections 203(e) and 203(k) of the Advisers Act as to IAI, it is hereby ORDERED 

that: 

 

A. IDI 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. 

 



 

11 

B. IAI cease and desist from committing or causing any violations  

and any future violations of Section 204 of the Advisers Act and Rule 204-2 thereunder. 

 

C. Respondents are censured.  

 

D. Respondents shall comply with the undertakings enumerated in paragraphs 35 to 

41 above. 

  

 E. Respondents, jointly and severally, shall, within 14 days of the entry of this 

Order, pay a civil money penalty in the amount of $35,000,000 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) Respondents may transmit payment electronically to the Commission, 

which will provide detailed ACH transfer/Fedwire instructions upon 

request;  

 

(2) Respondents 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) Respondents 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 

IDI and IAI as the Respondents 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 Andrew Dean, Co-Chief, 

Asset Management Unit, Securities and Exchange Commission, 100 Pearl Street, Suite 20-100, 

New York, New York 10004-2616.   

 

 F. 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, Respondents agree that in any Related 

Investor Action, they shall not argue that they are entitled to, nor shall they benefit by, offset or 

reduction of any award of compensatory damages by the amount of any part of Respondents’ 

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

Action grants such a Penalty Offset, Respondents agree that they shall, within 30 days after entry 



 

12 

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” means a private damages action brought against Respondents 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 

 

 


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