A number of major American and European-headquartered banks have set aside a combined amount of over $2 billion to cover anticipated fines for the use of unauthorised messaging apps to exchange confidential communications amongst employees. Regulatory authorities have been investigating and are now clamping down on the use of communication channels used by bankers and clients on messaging platforms like WhatsApp.
In July 2022, one multinational bank reached a resolution to pay U.S. regulators – the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) – fines amounting to $125 million and $75 million, respectively, for their employees using unofficial communication tools. A multinational investment bank agreed to pay fines of $200 million to the SEC and CFTC for civil investigations into the bank's failure to comply with records preservation rules applicable to broker-dealers, swap dealers, and futures commission merchants. The investigation discovered that the bank did not hold copies of certain communications required to be maintained under their respective record-keeping rules, essentially because such communications were sent or received by employees over electronic messaging channels that had not been approved for use by employees for business purposes.
These investigations have served as a wake-up call to all financial institutions dealing with market-sensitive information, to review the adequacy of their data governance and data...
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