SEC is investigating the cell phone use of Wall Street executives and employees: private messages should not discuss investment terms, client meetings and other business
The US Securities and Exchange Commission (SEC) started a large-scale trial over record keeping and communication at big banks, as reported by Bloomberg. The banks in question include Bank of America, Barclays, Citigroup, Deutsche Bank, Goldman Sachs, UBS and Morgan Stanley. The probe features a systematic search through personal mobile phone communication of more than 100 top traders and dealmakers.
Allegedly, the bankers could use personal messaging services such as WhatsApp to discuss investment terms, client meetings and other business-related issues, or even conduct deals. All of that violates regulatory requirements. At the same time, the switch to the work-from-home model due to the pandemic gave rise to the use of private messaging services for business communication.
Therefore, regulators are deeply concerned that messages have not been recorded or archived via official channels. SEC scrutiny has already led to the $200m fine paid by JPMorgan back in December 2021 over its use of WhatsApp. Now an industry-wide investigation might result in more fines with an aggregated value of over $1 billion.
Meanwhile, bank employees are expressing frustration and worry about the use of federal power that might violate their privacy rights.