Status: 09/28/2022 10:41 a.m
The US Securities and Exchange Commission has imposed a total of billions in fines on 16 Wall Street banks. Employees had exchanged business matters on private messenger apps.
Unregulated communication via messenger services like WhatsApp is costly for a number of large banks and financial firms in the United States. The fine totaled more than $1.1 billion, the US Securities and Exchange Commission announced yesterday.
Deutsche Bank Securities, Credit Suisse, UBS, Barclays, Bank of America, Citigroup, Goldman Sachs, Morgan Stanley, Nomura Securities International and Jeffries are among those affected. The banks each paid fines ranging from $10 million to $125 million.
SEC sees market confidence damaged
Employees of the financial institutions exchanged information on business matters via messenger apps such as WhatsApp. The US authorities saw this as a serious breach of the rules, since the companies could not archive the communication in the encrypted services as required.
SEC boss Gary Gensler criticized that the financial firms had thereby damaged market confidence. At the end of last year, fines totaling 200 million dollars were imposed on the major bank JPMorgan following the investigation.
Deutsche Bank statement
Deutsche Bank has already commented on yesterday’s SEC decision published an opinion: “Deutsche Bank has fully cooperated with the supervisory authorities on this industry-wide issue. The bank has also introduced new technical solutions for text and chat messages that are easy to use and in line with legal requirements. We will continue to expand these solutions, to meet the expectations of regulators and our customers.”
When bankers chat too much
But why is the handling of business matters via private messenger services such as WhatsApp or Signal such a thorn in the side of the supervisors? Very simple: These services can be set up so that messages are automatically deleted after a certain period of time.
This in turn makes it impossible for the SEC, but also for the corporate governance departments of the banks themselves, to trace whether a trader or advisor has given a customer a prohibited insider tip. Possibly illegal agreements between the banks are also not saved in this way.