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Scott Mlyn | CNBC
JPMorgan Chase is paying a $125 million fine to settle Securities and Exchange Commission charges that its Wall Street division allowed employees to use WhatsApp and other platforms to circumvent federal record-keeping laws.
The SEC said Friday in a statement that JPMorgan Securities admitted to “widespread” record-keeping failures in recent years. The bank’s employees used personal smartphones and email accounts, as well as messaging services including Meta-owned WhatsApp, to conduct securities business matters from at least January 2018 through November 2020, the regulator said.
SEC officials who spoke to reporters Thursday evening said JPMorgan’s failure to preserve those off-line conversations violated federal securities law and left the regulator blind to exchanges between the bank and its clients.
Federal law requires financial firms keep meticulous records of electronic messages between brokers and clients so regulators can make sure those firms aren’t skirting anti-fraud or antitrust laws.
The move is the latest sign of an ongoing battle between regulators, banks and employees over the use of personal devices. Policing the use of unofficial channels became even more pressing when most of Wall Street went remote during the coronavirus pandemic. Regulators in New York and London have ratcheted up enforcement of record-keeping rules recently as traders migrated to encrypted messaging platforms including WhatsApp, Signal or Telegram.
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