16 Wall Street Banks Slapped With $1.1 Billion In Penalties For Failing To Monitor WhatsApp Use
Update (1625ET): Hours after Bloomberg reported on the Wall Street WhatsApp settlement, the outlet reported that Goldman Sachs and Citigroup are among a group of 16 banks that have agreed to pay $1.1 billion in penalties for failing to monitor employees using unauthorized messaging apps.
The banks, along with Bank of America Corp. and Morgan Stanley, are among the 16 financial firms that reached agreements with the Securities and Exchange Commission, the regulator said in a statement Tuesday. -Bloomberg
Financial regulators require firms to closely monitor employee communications to minimize improper conduct.
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US Regulators are set to announce a massive settlement with Wall Street firms which failed to monitor employees using unauthorized messaging apps, sch as WhatsApp.
According to Bloomberg, the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) could release the results of the investigation as soon as Wednesday, and fines of around $2 billion, according to a person with knowledge of the matter, along with a Bloomberg analysis of disclosures made by the world's largest banks.
The massive penalties come nearly a year after JPMorgan agreed to pay $200 million in fines to both regulators to settle charges that it's Wall Street division allowed employees use WhatsApp and other platforms to circumvent federal record-keeping laws. The bank admitted to "widespread" record-keeping failures
In July, Morgan Stanley admitted that it was nearing a settlement that would see it pay a $200 million fine - a figure that other large banks with similar lapses are also expected to pay.
Meanwhile in February we reported that Deutsche Bank had been warning staffers not to delete work-related WhatsApp messages, and that the company would be "stepping up scrutiny" of employee communications out of concerns over US regulators cracking down. DB in particular has a sort of fraught history with Whatsapp, at one point banning it from company phones before it ultimately decided to embrace the app with a few important add-ons to ensure "compliance".
The massive settlements dwarf a 2006 penalty of $15 million imposed on Morgan Stanley over a failure to preserve emails.