SEC Examinations Failing Best Execution Documentation Requirements

$100,000 - $5,000,000+ per enforcement action depending on firm size and severity; typical SEC settlements include disgorgement of profits plus penalties; legal fees $200,000-$1,000,000; reputational damage leading to 5-15% client asset decline post-enforcement • $100,000-$750,000+ per examination cycle including SEC enforcement fines, disgorgement orders, mandatory corrective action implementations, legal fees for remediation, and reputational damage affecting client retention • $50,000-$500,000 per examination finding in settlement costs; potential $1M+ in enforcement actions for systemic documentation failures; revenue loss from client attrition due to compliance violations

Excel spreadsheets manually tracking execution prices across brokers; email chains documenting ad-hoc broker selection decisions; paper-based notes on execution quality comparisons; shared drives with inconsistent documentation; memory-based broker performance assessment; missing or incomplete quarterly review records • Manual Excel spreadsheets tracking broker-dealer comparisons; email chains documenting ad-hoc execution quality reviews; unstructured notes in client files; reliance on memory of which brokers were evaluated • Manual Excel spreadsheets, email chains, ad-hoc verbal discussions, memory-based evaluations, no centralized documentation of execution quality reviews, informal notes instead of formal policies