11 Wall Street Firms Slapped with $549M in Fines Over Messaging App Violations
US regulators handed fines to 11 Wall Street firms on Tuesday, totaling $549 million for their “widespread and longstanding failures” to preserve company communications from iMessage, WhatsApp and Signal, according to the U.S. Securities and Exchange Commission (SEC).
The combined penalties total $289 million to the SEC, while four agree to pay $260 million to the Commodity Futures Trading Commission (CFTC).
Wells Fargo agreed to pay $125 million to resolve claims that the bank used unauthorized electronic messaging channels. The lender is one of 11 firms that reached settlements, including BNP Paribas, BMO, Mizuho and Societe Generale.
The CFTC fined Wells Fargo $75 million over similar violations.
BNP Paribas was required to pay the second-largest combined penalty, with $75 million to the CFTC and $35 million to the SEC. The CFTC imposed a $75 million fine on Societe General and its securities division and a $35 million fine on the Bank of Montreal.
BMO Capital Markets and Mizuho Securities each agreed to pay $25 million; Houlihan Lokey Capital agreed to pay $15 million; Moelis & Company and Wedbush Securities each paid $10 million; and SMBC Nikko Securities paid the smallest fine of $9 million to the SEC.
“Today’s action stems from our continuing sweep to ensure that regulated entities, including broker-dealers and investment advisers, comply with their recordkeeping requirements, which are essential for us to monitor and enforce compliance with the federal securities laws,” SEC deputy director of enforcement Sanjay Wadhwa said.
The firms faced investigations addressing the use of personal messaging services by traders and brokers to talk about investment terms, client meetings, and other business-related issues. In violation of regulatory requirements is the use of WhatsApp and similar personal messaging services to conduct or discuss bank business. But the transition to working from home during the pandemic led to an increase in use of these services.
