In re Houlihan Lokey Capital

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UNITED STATES OF AMERICA 
 Before the 
 SECURITIES AND EXCHANGE COMMISSION 
 
SECURITIES EXCHANGE ACT OF 1934 
Release No. 98077 / August 8, 2023 
 
ADMINISTRATIVE PROCEEDING 
File No. 3-21553 
 
 
In the Matter of 
 
Houlihan Lokey Capital, Inc., 
 
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 Houlihan Lokey Capital, Inc. (“Respondent” or “Houlihan Lokey”). 
 
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
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 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 long 
 
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.  

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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 Houlihan 
Lokey employees throughout the firm, including at senior levels, to adhere to certain of these 
essential requirements and the firm’s own policies.  Using their personal devices, these employees 
communicated both internally and externally by personal text messages, or other text messaging 
platforms such as WhatsApp (“off-channel communications”). 
3. From at least January 2019, Houlihan Lokey employees sent and received off-
channel communications that related to the business of the broker-dealer operated by Houlihan 
Lokey.  Respondent did not maintain or preserve the substantial majority of these written 
communications.  Respondent’s failure was firm-wide, and involved employees at all levels of 
authority.  As a result, Houlihan Lokey violated Section 17(a) of the Exchange Act and Rule 
17a-4(b)(4) thereunder. 
4. Houlihan Lokey’s supervisors, who were responsible for supervising junior 
employees, routinely communicated off-channel using their personal devices.  In fact, heads of 
groups, managing directors across the firm, and senior supervisors responsible for supervising 
junior employees themselves failed to comply with Houlihan Lokey policies by communicating 
using non-firm approved methods on their personal devices about the firm’s broker-dealer 
business.  
5. Houlihan Lokey’s widespread failure to implement its policies and procedures that 
prohibit such communications led to its failure to reasonably supervise its employees within the 
meaning of Section 15(b)(4)(E) of the Exchange Act.  
6. During the time period that Houlihan Lokey failed to maintain and preserve off-
channel communications its employees sent and received related to the broker-dealer’s business, 
Houlihan Lokey received and responded to Commission subpoenas for documents and records 
requests in Commission investigations.  As a result, Houlihan Lokey’s recordkeeping failures 
likely impacted the Commission’s ability to carry out its regulatory functions and investigate 
violations of the federal securities laws across these investigations.   
7. Commission staff uncovered Houlihan Lokey’s misconduct after commencing a 
risk-based initiative to investigate the use of off-channel and unpreserved communications at 
broker-dealers.  Houlihan Lokey has initiated a review of its recordkeeping failures and begun a 
program of remediation.  As set forth in the Undertakings below, Houlihan Lokey will retain an 
independent compliance consultant to review and assess Houlihan Lokey’s remedial steps 
relating to its recordkeeping practices, policies and procedures, related supervisory practices, and 
employment actions. 
Respondent 
8. Houlihan Lokey is a California corporation with its principal office in Los Angeles, 
California and is registered with the Commission as a broker-dealer.  It is a wholly-owned 

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subsidiary of Houlihan Lokey, Inc., an investment bank and financial services firm headquartered 
in Los Angeles, California. 
 
Recordkeeping Requirements under the Exchange Act 
9. 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. 
10. The Commission adopted Rule 17a-4 pursuant to this authority.  Rule 17a-4 
specifies the manner and length of time that the records created in accordance with other 
Commission rules, and certain other records produced by broker-dealers, must be maintained and 
produced promptly to Commission representatives.  The rules adopted under Section 17(a)(1) of 
the Exchange Act, including Rule 17a-4(b)(4), require that broker-dealers preserve in an easily 
accessible place originals of all communications received and copies of all communications sent 
relating to the firm’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). 
Houlihan Lokey’s Policies and Procedures 
12. Houlihan Lokey 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. Houlihan Lokey employees 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 their personal devices.  
14. Messages sent through firm-approved communications methods were monitored, 
subject to review, and, when appropriate, archived.  Messages sent through unapproved 
communications methods, such as WhatsApp, Signal, and other unapproved applications on 
personal devices, were not monitored, subject to review or archived. 
15. Houlihan Lokey’s policies were designed to address supervisors’ supervision of 
employees’ training in the firm’s communications policies and adherence to firm’s books and 
recordkeeping requirements.   

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16. Houlihan Lokey, however, failed to implement a system of follow-up and review 
to determine that supervisors were reasonably following Houlihan Lokey’s policies.  While 
permitting employees to use approved communications methods, including on personal phones, 
for business communications, Houlihan Lokey failed to implement sufficient monitoring to 
assure that its recordkeeping and communications policies were being followed.  
Houlihan Lokey’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.  Houlihan Lokey cooperated with the investigation by voluntarily 
interviewing a sampling of senior and other broker-dealer personnel.  These personnel included 
senior leadership, group heads, and managing directors. 
18. The Commission staff’s investigation uncovered pervasive off-channel 
communications at all seniority levels of Houlihan Lokey’s broker-dealer.  The Houlihan Lokey 
investigation determined that all broker-dealer personnel sampled had engaged in at least some 
level of off-channel communications.  Overall, these personnel sent and received numerous off-
channel communications, involving other Houlihan Lokey personnel, Houlihan Lokey’s broker-
dealer customers, and other participants in the securities industry.  Within Houlihan Lokey, 
significant numbers of senior management, industry group heads, and managing directors 
participated in off-channel communications. 
19. From at least January 2019, Houlihan Lokey personnel sent and received off-
channel messages that concerned the broker-dealers’ businesses, including discussions of 
customer meetings and communications about market color, analysis, activity trends or events. 
20. For example, during the relevant period, a senior leader of Houlihan Lokey 
exchanged numerous off-channel business-related messages with Houlihan Lokey colleagues over 
whom he had authority.  These text messages covered internal firm business, financials, status 
updates, and workplace dynamics, and included conversations with other Houlihan Lokey senior 
leadership. 
21. Similarly, a managing director who was head of a business group exchanged 
messages with Houlihan Lokey employees who reported to him in the United States and abroad.  
This Houlihan Lokey employee texted business communications with at least one employee of 
another broker dealer, and with a number of Houlihan Lokey customers.  
22. In addition, a managing director who was head of another business group 
exchanged text messages or WhatsApp messages with more than five Houlihan Lokey employees, 
including at least three he supervised.  These messages covered a variety of topics, including 
customer development strategy, engagement/work fees, and pitches.  This managing director also 
routinely communicated with customers, investors, registered representatives of other broker-
dealers, and other market participants.  He had conversations with over 50 customers, investors, or 
other market participants during the relevant period including related to transaction terms.  

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Houlihan Lokey’s Failure to Preserve Required Records Potentially 
Compromised and Delayed Commission Matters 
23. Between January 2019 and October 2022, Houlihan Lokey received and responded 
to Commission subpoenas for documents and records requests in Commission investigations.  By 
failing to maintain and preserve required records relating to its broker-dealer business, Houlihan 
Lokey likely deprived the Commission of these off-channel communications in various 
investigations. 
Houlihan Lokey’s Violations and Failure to Supervise 
24. As a result of the conduct described above, from at least January 2019 through the 
date of this Order, Respondent willfully
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 violated Section 17(a) of the Exchange Act and Rule 
17a-4(b)(4) thereunder, which require broker-dealers to preserve for at least three years originals of 
all communications received and copies of all communications sent relating to its business as such.   
25. As a result of the conduct described above, Respondent failed reasonably to 
supervise its employees with a view to preventing or detecting certain of its employees’ 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.  
Houlihan Lokey’s Remedial Efforts 
26. In determining to accept the Offer, the Commission considered remedial acts 
promptly undertaken by Houlihan Lokey and cooperation afforded the Commission staff.  During 
the relevant period, Houlihan Lokey revised its policies and procedures and issued repeated 
reminders about its policies to broker-dealer staff.   
Undertakings 
27. Prior to this action, Houlihan Lokey enhanced its policies and procedures, and 
increased training concerning the use of approved communications methods, including on personal 
devices.  In addition, Respondent has undertaken to: 
28. Independent Compliance Consultant. 
a.  Houlihan Lokey shall retain, within thirty (30) days of the entry of this Order, 
the services of an independent compliance consultant (“Compliance Consultant”) that is 
not unacceptable to the Commission staff.  The Compliance Consultant’s compensation 
and expenses shall be borne exclusively by Houlihan Lokey. 
 
b.  Houlihan Lokey will oversee the work of the Compliance Consultant. 
 
 
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  “Willfully,” for purposes of imposing relief under Section 15(b) of the Exchange Act 
“‘means no more than that the person charged with the duty knows what he is doing.’”  
Wonsover v. SEC, 205 F.3d 408, 414 (D.C. Cir 2000) (quoting Hughes v. SEC, 174 F.2d 969, 
977 (D.C. Cir. 1949)).   

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c.  Houlihan Lokey 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.  Houlihan Lokey shall require that, within ninety (90) days of the date 
of the engagement letter, the Compliance Consultant conduct: 
 
i.  A comprehensive review of Houlihan Lokey’s supervisory, compliance, 
and other policies and procedures designed to ensure that Houlihan Lokey’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. 
 
ii.  A comprehensive review of training conducted by Houlihan Lokey 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 Houlihan Lokey 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 
Houlihan Lokey 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 Houlihan Lokey has 
begun implementing to meet the record retention requirements of the federal 
securities laws, including an assessment of the likelihood that Houlihan Lokey 
personnel will use the technological solutions going forward and a review of the 
measures employed by Houlihan Lokey to track employee usage of new 
technological solutions.  
 
v.  An assessment of the measures used by Houlihan Lokey to prevent the 
use of unauthorized communications methods for business communications by 
employees.  This assessment should include, but not be limited to, a review of 
Houlihan Lokey’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).   
 
vi.  A review of Houlihan Lokey’s electronic communications surveillance 
routines to ensure that electronic communications through approved 
communications methods found on Personal Devices are incorporated into 
Houlihan Lokey’s overall communications surveillance program.   
 
vii.  A comprehensive review of the framework adopted by Houlihan 
Lokey to address instances of non-compliance by Houlihan Lokey employees 

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with Houlihan Lokey’s policies and procedures concerning the use of Personal 
Devices to communicate about Houlihan Lokey business in the past.  This review 
shall include a survey of how Houlihan Lokey determined which employees 
failed to comply with Houlihan Lokey policies and procedures, the corrective 
action carried out, an evaluation of who violated policies and why, what penalties 
were imposed, and whether penalties were handed out consistently across 
business lines and seniority levels.   
 
d.  Houlihan Lokey shall require that, within forty-five (45) days after completion 
of the review set forth in sub-paragraphs c.i. through c.vii. above, the Compliance 
Consultant shall submit a detailed written report of its findings to Houlihan Lokey and to 
the Commission staff (the “Report”).  Houlihan Lokey 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 Houlihan Lokey’s policies and 
procedures, and a summary of the plan for implementing the recommended changes in or 
improvements to Houlihan Lokey’s policies and procedures. 
 
e.  Houlihan Lokey 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 Report, Houlihan Lokey shall advise the Compliance 
Consultant and the Commission staff in writing of any recommendations that Houlihan 
Lokey considers to be unduly burdensome, impractical, or inappropriate.  With respect to 
any recommendation that Houlihan Lokey considers unduly burdensome, impractical, or 
inappropriate, Houlihan Lokey 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 Houlihan Lokey’s policies or 
procedures on which Houlihan Lokey and the Compliance Consultant do not agree, 
Houlihan Lokey 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 Houlihan Lokey and the 
Compliance Consultant, Houlihan Lokey shall require that the Compliance Consultant 
inform Houlihan Lokey and the Commission staff in writing of the Compliance 
Consultant’s final determination concerning any recommendation that Houlihan Lokey 
considers to be unduly burdensome, impractical, or inappropriate.  Houlihan Lokey shall 
abide by the determinations of the Compliance Consultant and, within sixty (60) days 
after final agreement between Houlihan Lokey and the Compliance Consultant or final 
determination by the Compliance Consultant, whichever occurs first, Houlihan Lokey 
shall adopt and implement all of the recommendations that the Compliance Consultant 
deems appropriate. 
 
g.  Houlihan Lokey shall cooperate fully with the Compliance Consultant and 
shall provide the Compliance Consultant with access to such of Houlihan Lokey’s files, 
books, records, and personnel as are reasonably requested by the Compliance Consultant 

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for review. 
 
h. Houlihan Lokey 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.  Houlihan Lokey 
shall compensate the Compliance Consultant and persons engaged to assist the 
Compliance Consultant for services rendered under this Order at their reasonable and 
customary rates. 
 
i.  For the period of engagement and for a period of two years from completion of 
the engagement, Respondent 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 acting in their capacity as 
such.  
 
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) is otherwise required by law.  
 
29. One-Year Evaluation.  Houlihan Lokey shall require the Compliance Consultant 
to assess Houlihan Lokey’s program for the preservation, as required under the federal securities 
laws, of electronic communications, including those found on Personal Devices, commencing 
one year after submitting the Report required by Paragraph 28 above.  Houlihan Lokey shall 
require this review to evaluate Houlihan Lokey’s progress in the areas described in Paragraph 
28.c.i-vii above.  After this review, Houlihan Lokey shall require the Compliance Consultant to 
submit a report (the “One Year Report”) to Houlihan Lokey and the Commission staff and shall 
ensure that the One Year Report includes an updated assessment of Houlihan Lokey’s 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.  
30. Reporting Discipline Imposed.  For two years following the entry of this Order, 
Houlihan Lokey shall notify the Commission staff as follows upon the imposition of any 
discipline imposed by Houlihan Lokey, including, but not limited to, written warnings, loss of 
any pay, bonus, or incentive compensation, or the termination of employment, with respect to 
any employee found to have violated Houlihan Lokey’s policies and procedures concerning the 

9 
preservation of electronic communications, including those found on Personal Devices:  at least 
48 hours before the filing of a Form U-5, or within ten (10) days of the imposition of other 
discipline.   
31. Internal Audit.  In addition to the Compliance Consultant’s review and issuance of 
the One Year Report, Houlihan Lokey will also have its Internal Audit function conduct a separate 
audit(s) to assess Houlihan Lokey’s progress in the areas described in Paragraph 28.c.i-vii above.  
After completion of this audit(s), Houlihan Lokey shall ensure that Internal Audit submits a report 
to Houlihan Lokey and to the Commission staff. 
32. Recordkeeping.  Houlihan Lokey shall preserve, for a period of not less than six 
(6) years from the end of the fiscal year last used, the first two (2) years in an easily accessible 
place, any record of compliance with these undertakings. 
33. Deadlines.  For good cause shown, the Commission staff may extend any of the 
procedural dates relating to the undertakings.  Deadlines for procedural dates shall be counted in 
calendar days, except that if the last day falls on a weekend or federal holiday, the next business 
day shall be considered to be the last day. 
34. Certification.  Houlihan Lokey 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 be submitted to Alison R. Levine, Assistant Regional Director of the 
Enforcement Division, 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: 
 
 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 comply with the undertakings enumerated in paragraphs 27 to 
34 above. 
  
 D. Respondent shall, within 14 days of the entry of this Order, pay a civil money 

10 
penalty in the amount of $15,000,000 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 
Houlihan Lokey as a 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, Division of Enforcement, Securities and Exchange Commission, 
100 Pearl Street, Suite 20-100, New York, New York 10004-2616.   
 
 E. Amounts ordered to be paid as civil money penalties pursuant to this Order shall 
be treated as penalties 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” 
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 

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Commission in this proceeding. 
 
 
 By the Commission. 
 
 
 
Vanessa A. Countryman 
       Secretary 

1 

UNITED STATES OF AMERICA 
 Before the 
 SECURITIES AND EXCHANGE COMMISSION 
 
SECURITIES EXCHANGE ACT OF 1934 
Release No. 98077 / August 8, 2023 
 
ADMINISTRATIVE PROCEEDING 
File No. 3-21553 
 
 
In the Matter of 
 

Houlihan Lokey Capital, Inc., 
 
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 Houlihan Lokey Capital, Inc. (“Respondent” or “Houlihan Lokey”). 

 
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 long 

 
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 

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 Houlihan 
Lokey employees throughout the firm, including at senior levels, to adhere to certain of these 
essential requirements and the firm’s own policies.  Using their personal devices, these employees 
communicated both internally and externally by personal text messages, or other text messaging 
platforms such as WhatsApp (“off-channel communications”). 

3. From at least January 2019, Houlihan Lokey employees sent and received off-
channel communications that related to the business of the broker-dealer operated by Houlihan 
Lokey.  Respondent did not maintain or preserve the substantial majority of these written 
communications.  Respondent’s failure was firm-wide, and involved employees at all levels of 
authority.  As a result, Houlihan Lokey violated Section 17(a) of the Exchange Act and Rule 
17a-4(b)(4) thereunder. 

4. Houlihan Lokey’s supervisors, who were responsible for supervising junior 
employees, routinely communicated off-channel using their personal devices.  In fact, heads of 
groups, managing directors across the firm, and senior supervisors responsible for supervising 
junior employees themselves failed to comply with Houlihan Lokey policies by communicating 
using non-firm approved methods on their personal devices about the firm’s broker-dealer 
business.  

5. Houlihan Lokey’s widespread failure to implement its policies and procedures that 
prohibit such communications led to its failure to reasonably supervise its employees within the 
meaning of Section 15(b)(4)(E) of the Exchange Act.  

6. During the time period that Houlihan Lokey failed to maintain and preserve off-
channel communications its employees sent and received related to the broker-dealer’s business, 
Houlihan Lokey received and responded to Commission subpoenas for documents and records 
requests in Commission investigations.  As a result, Houlihan Lokey’s recordkeeping failures 
likely impacted the Commission’s ability to carry out its regulatory functions and investigate 
violations of the federal securities laws across these investigations.   

7. Commission staff uncovered Houlihan Lokey’s misconduct after commencing a 
risk-based initiative to investigate the use of off-channel and unpreserved communications at 
broker-dealers.  Houlihan Lokey has initiated a review of its recordkeeping failures and begun a 
program of remediation.  As set forth in the Undertakings below, Houlihan Lokey will retain an 
independent compliance consultant to review and assess Houlihan Lokey’s remedial steps 
relating to its recordkeeping practices, policies and procedures, related supervisory practices, and 
employment actions. 

Respondent 

8. Houlihan Lokey is a California corporation with its principal office in Los Angeles, 
California and is registered with the Commission as a broker-dealer.  It is a wholly-owned 



3 

subsidiary of Houlihan Lokey, Inc., an investment bank and financial services firm headquartered 
in Los Angeles, California. 
 

Recordkeeping Requirements under the Exchange Act 

9. 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. 

10. The Commission adopted Rule 17a-4 pursuant to this authority.  Rule 17a-4 
specifies the manner and length of time that the records created in accordance with other 
Commission rules, and certain other records produced by broker-dealers, must be maintained and 
produced promptly to Commission representatives.  The rules adopted under Section 17(a)(1) of 
the Exchange Act, including Rule 17a-4(b)(4), require that broker-dealers preserve in an easily 
accessible place originals of all communications received and copies of all communications sent 
relating to the firm’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). 

Houlihan Lokey’s Policies and Procedures 

12. Houlihan Lokey 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. Houlihan Lokey employees 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 their personal devices.  

14. Messages sent through firm-approved communications methods were monitored, 
subject to review, and, when appropriate, archived.  Messages sent through unapproved 
communications methods, such as WhatsApp, Signal, and other unapproved applications on 
personal devices, were not monitored, subject to review or archived. 

15. Houlihan Lokey’s policies were designed to address supervisors’ supervision of 
employees’ training in the firm’s communications policies and adherence to firm’s books and 
recordkeeping requirements.   



4 

16. Houlihan Lokey, however, failed to implement a system of follow-up and review 
to determine that supervisors were reasonably following Houlihan Lokey’s policies.  While 
permitting employees to use approved communications methods, including on personal phones, 
for business communications, Houlihan Lokey failed to implement sufficient monitoring to 
assure that its recordkeeping and communications policies were being followed.  

Houlihan Lokey’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.  Houlihan Lokey cooperated with the investigation by voluntarily 
interviewing a sampling of senior and other broker-dealer personnel.  These personnel included 
senior leadership, group heads, and managing directors. 

18. The Commission staff’s investigation uncovered pervasive off-channel 
communications at all seniority levels of Houlihan Lokey’s broker-dealer.  The Houlihan Lokey 
investigation determined that all broker-dealer personnel sampled had engaged in at least some 
level of off-channel communications.  Overall, these personnel sent and received numerous off-
channel communications, involving other Houlihan Lokey personnel, Houlihan Lokey’s broker-
dealer customers, and other participants in the securities industry.  Within Houlihan Lokey, 
significant numbers of senior management, industry group heads, and managing directors 
participated in off-channel communications. 

19. From at least January 2019, Houlihan Lokey personnel sent and received off-
channel messages that concerned the broker-dealers’ businesses, including discussions of 
customer meetings and communications about market color, analysis, activity trends or events. 

20. For example, during the relevant period, a senior leader of Houlihan Lokey 
exchanged numerous off-channel business-related messages with Houlihan Lokey colleagues over 
whom he had authority.  These text messages covered internal firm business, financials, status 
updates, and workplace dynamics, and included conversations with other Houlihan Lokey senior 
leadership. 

21. Similarly, a managing director who was head of a business group exchanged 
messages with Houlihan Lokey employees who reported to him in the United States and abroad.  
This Houlihan Lokey employee texted business communications with at least one employee of 
another broker dealer, and with a number of Houlihan Lokey customers.  

22. In addition, a managing director who was head of another business group 
exchanged text messages or WhatsApp messages with more than five Houlihan Lokey employees, 
including at least three he supervised.  These messages covered a variety of topics, including 
customer development strategy, engagement/work fees, and pitches.  This managing director also 
routinely communicated with customers, investors, registered representatives of other broker-
dealers, and other market participants.  He had conversations with over 50 customers, investors, or 
other market participants during the relevant period including related to transaction terms.  



5 

Houlihan Lokey’s Failure to Preserve Required Records Potentially 
Compromised and Delayed Commission Matters 

23. Between January 2019 and October 2022, Houlihan Lokey received and responded 
to Commission subpoenas for documents and records requests in Commission investigations.  By 
failing to maintain and preserve required records relating to its broker-dealer business, Houlihan 
Lokey likely deprived the Commission of these off-channel communications in various 
investigations. 

Houlihan Lokey’s Violations and Failure to Supervise 

24. As a result of the conduct described above, from at least January 2019 through the 
date of this Order, Respondent willfully2 violated Section 17(a) of the Exchange Act and Rule 
17a-4(b)(4) thereunder, which require broker-dealers to preserve for at least three years originals of 
all communications received and copies of all communications sent relating to its business as such.   

25. As a result of the conduct described above, Respondent failed reasonably to 
supervise its employees with a view to preventing or detecting certain of its employees’ 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.  

Houlihan Lokey’s Remedial Efforts 

26. In determining to accept the Offer, the Commission considered remedial acts 
promptly undertaken by Houlihan Lokey and cooperation afforded the Commission staff.  During 
the relevant period, Houlihan Lokey revised its policies and procedures and issued repeated 
reminders about its policies to broker-dealer staff.   

Undertakings 

27. Prior to this action, Houlihan Lokey enhanced its policies and procedures, and 
increased training concerning the use of approved communications methods, including on personal 
devices.  In addition, Respondent has undertaken to: 

28. Independent Compliance Consultant. 

a.  Houlihan Lokey shall retain, within thirty (30) days of the entry of this Order, 
the services of an independent compliance consultant (“Compliance Consultant”) that is 
not unacceptable to the Commission staff.  The Compliance Consultant’s compensation 
and expenses shall be borne exclusively by Houlihan Lokey. 

 
b.  Houlihan Lokey will oversee the work of the Compliance Consultant. 
 

 
2  “Willfully,” for purposes of imposing relief under Section 15(b) of the Exchange Act 
“‘means no more than that the person charged with the duty knows what he is doing.’”  
Wonsover v. SEC, 205 F.3d 408, 414 (D.C. Cir 2000) (quoting Hughes v. SEC, 174 F.2d 969, 
977 (D.C. Cir. 1949)).   



6 

c.  Houlihan Lokey 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.  Houlihan Lokey shall require that, within ninety (90) days of the date 
of the engagement letter, the Compliance Consultant conduct: 

 
i.  A comprehensive review of Houlihan Lokey’s supervisory, compliance, 

and other policies and procedures designed to ensure that Houlihan Lokey’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. 

 
ii.  A comprehensive review of training conducted by Houlihan Lokey 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 Houlihan Lokey 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 

Houlihan Lokey 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 Houlihan Lokey has 

begun implementing to meet the record retention requirements of the federal 
securities laws, including an assessment of the likelihood that Houlihan Lokey 
personnel will use the technological solutions going forward and a review of the 
measures employed by Houlihan Lokey to track employee usage of new 
technological solutions.  

 
v.  An assessment of the measures used by Houlihan Lokey to prevent the 

use of unauthorized communications methods for business communications by 
employees.  This assessment should include, but not be limited to, a review of 
Houlihan Lokey’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).   

 
vi.  A review of Houlihan Lokey’s electronic communications surveillance 

routines to ensure that electronic communications through approved 
communications methods found on Personal Devices are incorporated into 
Houlihan Lokey’s overall communications surveillance program.   

 
vii.  A comprehensive review of the framework adopted by Houlihan 

Lokey to address instances of non-compliance by Houlihan Lokey employees 



7 

with Houlihan Lokey’s policies and procedures concerning the use of Personal 
Devices to communicate about Houlihan Lokey business in the past.  This review 
shall include a survey of how Houlihan Lokey determined which employees 
failed to comply with Houlihan Lokey policies and procedures, the corrective 
action carried out, an evaluation of who violated policies and why, what penalties 
were imposed, and whether penalties were handed out consistently across 
business lines and seniority levels.   

 
d.  Houlihan Lokey shall require that, within forty-five (45) days after completion 

of the review set forth in sub-paragraphs c.i. through c.vii. above, the Compliance 
Consultant shall submit a detailed written report of its findings to Houlihan Lokey and to 
the Commission staff (the “Report”).  Houlihan Lokey 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 Houlihan Lokey’s policies and 
procedures, and a summary of the plan for implementing the recommended changes in or 
improvements to Houlihan Lokey’s policies and procedures. 

 
e.  Houlihan Lokey 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 Report, Houlihan Lokey shall advise the Compliance 
Consultant and the Commission staff in writing of any recommendations that Houlihan 
Lokey considers to be unduly burdensome, impractical, or inappropriate.  With respect to 
any recommendation that Houlihan Lokey considers unduly burdensome, impractical, or 
inappropriate, Houlihan Lokey 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 Houlihan Lokey’s policies or 

procedures on which Houlihan Lokey and the Compliance Consultant do not agree, 
Houlihan Lokey 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 Houlihan Lokey and the 
Compliance Consultant, Houlihan Lokey shall require that the Compliance Consultant 
inform Houlihan Lokey and the Commission staff in writing of the Compliance 
Consultant’s final determination concerning any recommendation that Houlihan Lokey 
considers to be unduly burdensome, impractical, or inappropriate.  Houlihan Lokey shall 
abide by the determinations of the Compliance Consultant and, within sixty (60) days 
after final agreement between Houlihan Lokey and the Compliance Consultant or final 
determination by the Compliance Consultant, whichever occurs first, Houlihan Lokey 
shall adopt and implement all of the recommendations that the Compliance Consultant 
deems appropriate. 

 
g.  Houlihan Lokey shall cooperate fully with the Compliance Consultant and 

shall provide the Compliance Consultant with access to such of Houlihan Lokey’s files, 
books, records, and personnel as are reasonably requested by the Compliance Consultant 



8 

for review. 
 
h. Houlihan Lokey 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.  Houlihan Lokey 
shall compensate the Compliance Consultant and persons engaged to assist the 
Compliance Consultant for services rendered under this Order at their reasonable and 
customary rates. 

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

the engagement, Respondent 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 acting in their capacity as 
such.  

 
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) is otherwise required by law.  

 
29. One-Year Evaluation.  Houlihan Lokey shall require the Compliance Consultant 

to assess Houlihan Lokey’s program for the preservation, as required under the federal securities 
laws, of electronic communications, including those found on Personal Devices, commencing 
one year after submitting the Report required by Paragraph 28 above.  Houlihan Lokey shall 
require this review to evaluate Houlihan Lokey’s progress in the areas described in Paragraph 
28.c.i-vii above.  After this review, Houlihan Lokey shall require the Compliance Consultant to 
submit a report (the “One Year Report”) to Houlihan Lokey and the Commission staff and shall 
ensure that the One Year Report includes an updated assessment of Houlihan Lokey’s 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.  

30. Reporting Discipline Imposed.  For two years following the entry of this Order, 
Houlihan Lokey shall notify the Commission staff as follows upon the imposition of any 
discipline imposed by Houlihan Lokey, including, but not limited to, written warnings, loss of 
any pay, bonus, or incentive compensation, or the termination of employment, with respect to 
any employee found to have violated Houlihan Lokey’s policies and procedures concerning the 



9 

preservation of electronic communications, including those found on Personal Devices:  at least 
48 hours before the filing of a Form U-5, or within ten (10) days of the imposition of other 
discipline.   

31. Internal Audit.  In addition to the Compliance Consultant’s review and issuance of 
the One Year Report, Houlihan Lokey will also have its Internal Audit function conduct a separate 
audit(s) to assess Houlihan Lokey’s progress in the areas described in Paragraph 28.c.i-vii above.  
After completion of this audit(s), Houlihan Lokey shall ensure that Internal Audit submits a report 
to Houlihan Lokey and to the Commission staff. 

32. Recordkeeping.  Houlihan Lokey shall preserve, for a period of not less than six 
(6) years from the end of the fiscal year last used, the first two (2) years in an easily accessible 
place, any record of compliance with these undertakings. 

33. Deadlines.  For good cause shown, the Commission staff may extend any of the 
procedural dates relating to the undertakings.  Deadlines for procedural dates shall be counted in 
calendar days, except that if the last day falls on a weekend or federal holiday, the next business 
day shall be considered to be the last day. 

34. Certification.  Houlihan Lokey 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 be submitted to Alison R. Levine, Assistant Regional Director of the 
Enforcement Division, 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: 
 
 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 comply with the undertakings enumerated in paragraphs 27 to 

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



10 

penalty in the amount of $15,000,000 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 

Houlihan Lokey as a 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, Division of Enforcement, Securities and Exchange Commission, 
100 Pearl Street, Suite 20-100, New York, New York 10004-2616.   
 
 E. Amounts ordered to be paid as civil money penalties pursuant to this Order shall 
be treated as penalties 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” 
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 



11 

Commission in this proceeding. 
 
 
 By the Commission. 
 
 
 

Vanessa A. Countryman 
       Secretary 


	UNITED STATES OF AMERICA
	In the Matter of
	Houlihan Lokey Capital, Inc.,
	Respondent.
	I.
	II.
	III.
	Summary
	Respondent
	Recordkeeping Requirements under the Exchange Act
	Houlihan Lokey’s Policies and Procedures
	Houlihan Lokey’s Recordkeeping Failures Across Its Brokerage Business
	Houlihan Lokey’s Failure to Preserve Required Records Potentially Compromised and Delayed Commission Matters
	Houlihan Lokey’s Violations and Failure to Supervise
	Houlihan Lokey’s Remedial Efforts
	Undertakings

	IV.