September 29, 2022
The U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission (CFTC) have fined 16 banks and brokerage firms a total of $1.8 billion.
The firms were fined after employees were caught using private text messaging apps to discuss work and not storing those messages, in violation of record-keeping and data protection rules.
According to the SEC, the companies collected widespread off-channel communications from employees such as senior and subordinate investment bankers and debt and equity traders.
According to the CFTC, many communications have been designed to keep the bank’s internal compliance and regulatory agencies in the dark. Furthermore, because many private communication channels are end-to-end encrypted, there is no recoverable record of the bank’s supervision. Moreover, some CFTC and SEC executives have even told lies.
The banks fined include Barclays Capital Inc.; BofA Securities Inc., in conjunction with Merrill Lynch, Pierce, Fenner & Smith Inc.; Citigroup Global Markets Inc.; Credit Suisse Securities (USA) LLC; Deutsche Bank Securities Inc., in conjunction with DWS Distributors Inc. and DWS Investment Management Americas, Inc.; Goldman Sachs & Co. LLC; Morgan Stanley & Co. LLC, in conjunction with Morgan Stanley Smith Barney LLC; and UBS Securities LLC, in conjunction with UBS.
While brokerage Jefferies LLC and Nomura Securities International have agreed to pay penalties of $50 million each, brokers Cantor Fitzgerald & Co. have agreed to pay a $10 million penalty.
The sources for this piece include an article in COMPUTERWORLD.
