BGC Financial, a New York City broker-dealer, has agreed to pay a $1.25 million penalty to settle charges that it failed to preserve audio files sought by the Securities and Exchange Commission, the SEC announced Tuesday.
BGC also inaccurately recorded travel, entertainment, and other expenses, including $600,000 a year for season tickets to sporting events, the SEC said. BGC neither admitted nor denied the charges.
According to the SEC’s order, BGC deleted audio files of eight brokers’ telephone conversations after receiving requests for them in 2014 from the SEC’s Division of Enforcement. According to the order, the BGC department responsible for maintaining voice recordings was unaware of the SEC’s request and deleted the files in keeping with the firm’s policy of not maintaining them after one year.
The SEC order also said that BGC failed to maintain books and records that accurately recorded compensation, travel, entertainment and gifts for brokers. One high-performing BGC broker received $600,000 worth of sports season tickets each year and another $100,000 for foreign travel, including his birthday party.
BGC also reimbursed a different broker for thousands of dollars of personal expenses spent on his birthday party, his bachelor party and two separate trips to Las Vegas for his friends’ bachelor parties without keeping the proper records, the SEC said.