US banks fined billions because employees used WhatsApp
The US Securities and Exchange Commission has fined a dozen banks a total of $1.1 billion. The reason: failures in data protection. Employees of the financial institutions had previously exchanged views on internal bank matters via WhatsApp.
Failure to communicate via messenger services like WhatsApp is costing more than a dozen US financial institutions dearly. Like the US Securities and Exchange Commission (SEC) in one statements announced, 15 banks and brokers have to pay a fine totaling 1.1 billion US dollars.
There was no lengthy court case. After the SEC filed indictments, the affected financial institutions admitted “that their conduct violated the record keeping requirements of the federal securities laws.”
WhatsApp: Financial institutions admit omissions
Accordingly, all banks and brokers agreed to pay penalties totaling around 1.1 billion US dollars. In addition, they have already begun to improve their compliance policies and procedures to address the allegations.
Most of the companies such as Goldman Sachs, Morgan Stanley and Barclays Capital agreed to pay 125 million US dollars each – including a subsidiary of Deutsche Bank. All other financial institutions promised fines of between 10 and 50 million US dollars.
Violation of the Securities Act: Employees communicated via messenger
The SEC had already initiated corresponding investigations in October 2021. The investigators uncovered “widespread communication outside of official channels”.
From January 2018 to September 2021, numerous employees of the financial institutions concerned communicated about business matters using private devices and messenger services such as WhatsApp. The companies have not retained the majority of these messages. This, in turn, constitutes a violation of the US Securities Act.
These omissions have deprived the Securities and Exchange Commission of the ability to use non-official communications for various investigations. The incidents, in turn, took place in all of the accused companies and at various levels of the business – including among supervisors and senior executives.
Also interesting:
