U.S. regulators on Tuesday announced a combined $549 million in penalties against Wells Fargo and a raft of smaller or non-U.S. firms that failed to maintain electronic records of employee communications.
The Commodity Futures Trading Commission also announced it fined four banks a total of $260 million for failing to maintain the records required by the agency. The Securities and Exchange Commission also announced charges and $289 million in fines against 11 firms for “widespread and longstanding failures” in record-keeping.
That was the latest move by regulators to stop Wall Street employees and management from frequently using secure messaging apps like Signal, Meta's WhatsApp, or Apple's iMessage. The watchdogs negotiated settlements with major participants like JPMorgan Chase, Goldman Sachs, Morgan Stanley, and Citigroup beginning in late 2021. The SEC and CFTC report that the issue has resulted in fines totaling more than $2 billion.
“Today’s actions stem 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,” Sanjay Wadhwa, deputy director of enforcement at the SEC, said in the statement.
The companies acknowledged using WhatsApp for employee business communication starting at least in 2019, failing to maintain records “in violation of federal securities laws,” the SEC said on Tuesday.