06:57 AM EDT, 08/15/2024 (MT Newswires) -- Toronto-Dominion Bank ( MLWIQXX ) (TD.TO, TD) and Royal Bank of Canada ( RY ) (RY.TO, RY) are paying multimillion-dollar penalties to settle charges with the U.S. Securities and Exchange Commission over their employees' unapproved communication methods, The Globe and Mail newspaper is reporting.

It noted TD Bank will pay a US$46.5-million penalty, including a fine against investment bank Cowen and Co., which TD recently acquired. RBC will pay a US$45-million penalty.

TD Bank is also paying a US$78-million civil penalty to settle charges with the Commodity Futures Trading Commission over the same issue.

In total, the report noted, the SEC announced US$393-million worth of settlements on Wednesday, affecting 26 companies. The CFTC has imposed US$1.2-billion in civil monetary penalties on 24 financial institutions since 2021.

"Each of the SEC's investigations uncovered pervasive and long-standing use of unapproved communication methods, known as off-channel communications, at these firms," the regulator said in a statement. Conversations by personal text message and chat apps, such as WhatsApp, fall into this category, the report noted.

"As described in the SEC's orders, the firms admitted that, during the relevant periods, their personnel sent and received off-channel communications that were records required to be maintained under the securities laws. The failure to maintain and preserve required records deprives the SEC of these communications in its investigations."

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