The SEC Went Quiet on Off-Channel Comms. FINRA Didn't.

The last SEC sweep was over a year ago

The SEC hasn't brought a new off-channel communications sweep since January 13, 2025, when it settled with 12 firms for a combined $63 million. That's more than a year without a fresh headline-grabbing action — a sharp contrast to the pace of 2023 and 2024. If your compliance program has quietly deprioritized off-channel risk because "the SEC stopped announcing these," the record says otherwise on two fronts: the SEC isn't finished with the sweep it already brought, and FINRA has picked up where the headlines left off.

The SEC isn't gone — it's in litigation mode

Three developments from the past several weeks show the SEC still has active legal exposure tied to the original sweep, even without new settlements:

Apex Clearing's Fifth Circuit appeal (argued March 2, 2026). Apex Clearing Corp. told the appeals court it received harsher settlement terms than other firms swept up in the same enforcement wave for comparable conduct, and asked the court to alter those terms. The SEC had previously denied Apex's bid to modify its settlement while imposing less burdensome sanctions on other firms. A ruling here could set precedent for how consistently the SEC has to apply penalties across firms caught in the same sweep — worth watching regardless of which side wins.

The ASA's FOIA win in the Middle District of Florida (March 5, 2026). Judge Steven Merryday ordered the SEC to disclose sections of 52 internal spreadsheets enforcement staff used to calculate penalties against broker-dealers investigated or settled over recordkeeping failures. The case traces back to the American Securities Association's 2024 FOIA complaint seeking insight into how the SEC arrived at the billions of dollars in fines levied across the sweep. If those spreadsheets show inconsistent methodology, it strengthens exactly the kind of argument Apex is making in the Fifth Circuit.

SEC v. Arete Wealth Management (N.D. Ill., Feb. 27, 2026). A federal judge refused to dismiss the SEC's off-channel communications claims, rejecting the defendants' argument that the books-and-records rule is unconstitutionally vague. The court also rejected the argument that industry-wide use of unapproved channels, or individual SEC commissioners' public dissatisfaction with the rule, should count as a defense. This matters for firms tempted to read the SEC's slower sweep cadence as softening enforcement appetite: a federal court just upheld the underlying rule on the merits, in a live fraud case, weeks ago.

None of this is the SEC "going away." It's the SEC litigating the last round while it decides whether — or when — to bring the next one.

FINRA moved into the space the SEC left open

While SEC sweep headlines went quiet, FINRA kept bringing individual firm actions under its own recordkeeping and supervision authority.

Velox Clearing LLC — $500,000 fine (reported March 2026). FINRA fined the clearing firm for failing to capture and retain off-channel communications and for failing to implement a system of supervision and surveillance to identify potentially manipulative trading. FINRA's investigation found that since January 2019, Velox lacked the retention and supervision policies its own written procedures required — despite a policy mandating that all business communication run through firm-provided platforms, employees used SMS/text and WeChat for both internal and client communications.

The Velox action is instructive on a point compliance officers sometimes miss: having a written off-channel policy on file did nothing for Velox. FINRA Rule 3110 and FINRA Rule 4511 look at what a firm actually captured and supervised, not what its handbook says it should have captured and supervised. A policy without an enforcement mechanism is not a control — it's a document a regulator will read back to you as evidence you knew the risk and didn't close it.

What the divergence means for your program

Two regulators, two postures, same underlying obligation. Firms subject to both SEC and FINRA jurisdiction don't get to pick which enforcement posture governs their risk assessment. Exchange Act Rule 17a-4(b)(4) and Advisers Act Rule 204-2(a)(7) haven't moved. FINRA Rule 3110's supervision requirement hasn't moved. What's moved is which regulator is more likely to be the one that finds your gap first, and Velox suggests FINRA is comfortable bringing five-figure-to-mid-six-figure individual actions on facts that, a year ago, might have waited for the next SEC sweep to surface.

Firms we work with tend to treat "no sweep in the news this quarter" as a signal to deprioritize off-channel remediation. The Arete ruling and the Velox fine argue the opposite: the legal theory underlying these actions was just reaffirmed in federal court, and the regulator most actively enforcing it right now isn't the one that went quiet.

The practical takeaway

If your firm's WeChat, WhatsApp, or SMS usage among registered reps hasn't been formally reviewed since the SEC's January 2025 settlements, that gap predates the current lull — and FINRA's exam and enforcement staff aren't waiting for the SEC's next move to look at it. Capturing personal-device communications into your existing archive (Smarsh, Global Relay, Bloomberg, Microsoft) closes the specific factual gap FINRA cited at Velox: employees defaulting to unapproved channels because approved ones were inconvenient. That's a solvable operational problem, not a legal question waiting on the next headline.