November 24, 2022
  • November 24, 2022

Big banks face big fines for messaging apps

By on July 15, 2022 0

Five of America’s biggest investment banks are set to pay a combined $1 billion in fines for letting their employees use unauthorized messaging apps.

As Bloomberg News reported Friday, July 15, Morgan Stanley is set to pay a $200 million fine, the same amount JPMorgan Chase has already paid.

Meanwhile, Citigroup, Goldman Sachs and Bank of America are also in talks to pay regulators a similar fine, sources told Bloomberg.

New York-based Citigroup took a one-time reservation for the investigation, chief financial officer Mark Mason said on an earnings call on Friday, calling it “appropriate” and “in line with what our peers have revealed.” .

Related: BaFin asks Deutsche Bank for clarification on corporate communications via WhatsApp

And Morgan Stanley said its fine was “related to a specific regulatory issue regarding the use of unapproved personal devices and corporate record-keeping requirements.”

The Bloomberg report notes that the $1 billion figure is an unusual escalation on the part of regulators in a case like this, as fines are typically much lower.

Financial firms are required to closely monitor business communications, but the system has been hampered by the rise of mobile messaging apps and employees working from home during the COVID pandemic.

Read more: HSBC under fire over allegations of misuse of WhatsApp by bankers

The Commodities Futures Trading Commission (CFTC) and Securities and Exchange Commission (SEC) fined JPMorgan Chase & Co $200 million last December after learning that bank staff had sent work-related information using messaging platforms like WhatsApp or personal emails.

And earlier this year, the CFTC opened an investigation into London banking giant HSBC over alleged use by the company’s bankers of “messaging platforms not approved by HSBC”.

In May, German financial watchdog BaFin ordered Deutsche Bank to clarify how its staff uses private messages on WhatsApp for marketing purposes.

As PYMNTS reported at the time, senior bank executives used WhatsApp, other messaging tools, and private email accounts to conduct business.

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