The Morgan Stanley bank was fined 200 million dollars (about 195 million euros), it announced when it published its financial results for the second quarter on July 14. This sanction refers to the use of unapproved personal devices by employees to chat with each other.
The next day, Citigroup, another major Wall Street investment bank, said it had set aside a similar amount for the same events, Bloomberg reports. The financial information site also indicates that Goldman Sachs and Bank of America are in advanced talks to pay financial authorities $200 million, again for the same reasons.
Use of SMS and private emails
In December 2021, the US market police (SEC) and the derivatives regulator (CFTC) imposed a fine of 125 million dollars (approximately 122 million euros) on JPMorgan. Here again, the US bank was criticized for failing to sufficiently monitor its employees’ trades. This also led to the dismissal of a star trader from the bank.
The SEC report explains that JPMorgan acknowledged that between January 2018 and November 2020, its employees often discussed business-related matters from their personal devices. They would have used SMS, Whatsapp or personal email addresses to chat with each other. They are therefore close to a billion dollars in fines that the five main banks in the United States will have to pay.
Monitor employee discussions
Financial companies are required to verify all trades related to their employees’ business. This is to prevent inappropriate behavior. A task made very difficult by the Covid-19 pandemic and the proliferation of remote exchanges.
Very widespread, Whatsapp is one of the problematic applications since it does not allow banks to monitor the conversations of their employees. In 2017, the largest German bank, Deutsche Bank, outright banned the use of messaging apps. Whatsapp, but also Skype, Hangouts or Apple iMessages had been banned, because they could not be archived, in favor of emails.
The Whatsapp app has since been reintroduced at Deutsche Bank. But, as Bloomberg points out, employees are prohibited from deleting their conversations to allow for an audit of practices.
Source: BFM TV
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