Top Wall Street banks will pay a combined $549 million in fines after admitting that their employees, “including those at senior levels,” frequently communicated about their employers’ business through various messaging apps on their personal devices, including iMessage, WhatsApp, and Signal.
The banks were penalized by the US Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) for failing to turn over staff communications that were conducted “off-channel” dating back at least to 2019.
11 companies were charged by the SEC after they and their employees consistently and widely failed to retain and preserve electronic communications.
They agreed to pay a total of $289 million in fines after admitting that their actions were in violation of the federal securities laws’ record-keeping requirements.
“Today’s actions remind us that many still have not,” said Gurbir S. Grewal, Director of the SEC’s Division of Enforcement, in a statement late Tuesday. “While some broker-dealers and investment advisers have heeded this message, self-reported violations, or improved internal policies and procedures, today’s actions remind us that many still have not.”
Sanjay Wadhwa, Deputy Director of Enforcement, said, “Recordkeeping failures like those here undermine our ability to exercise effective regulatory oversight, frequently at the expense of investors.”
Each of the businesses received a stop-and-desist order and a reprimand in addition to the hefty cash penalties for their past recordkeeping infractions.
For like grounds, the US CFTC also levied a $260 million penalties against prominent Wall Street institutions.