On July 14th, a well-known investment bank announced that it expects to pay a $200 million dollar fine because of its unapproved usage of personal devices and the Firm’s record-keeping requirements. The $200 million figure is based on discussions the bank had with the SEC and the Commodity Futures Trading Commission.
Similarly, one of the Firm’s rivals was fined $200 million in December due to failures in maintaining and preserving written communication. These charges came as a result of employees using unofficial channels such as WhatsApp and personal devices to discuss business.
Key Takeaway to the Fine
Finance firms are subject to intensive monitoring of their communications, such that the SEC & other regulatory forces can prevent the occurrence of insider trading and similar threats.
The continued introduction of new communication methods has made this monitoring process even more challenging for regulatory forces. Recently, regulators have been cracking down on alternative communication methods across Wall Street to protect the integrity of the markets.
Vigilant’s Final Conclusion
This should serve as a continued warning for the entire Financial Industry after seeing a similar fine occur back in December.
Firms should examine Text Messaging Policies, including client servicing members of the team, to see if they are utilizing text messaging.