16 Wall Street firms fined $1.8bn over staff indulging in ‘off-channel communications’


US financial watchdogs have fined some of Wall Street’s biggest companies a total of $1.8bn after it was found that the staff discussed deals and trades on their personal devices and apps, BBC reported. The Securities and Exchange Commission (SEC) says the investigation uncovered “pervasive off-channel communications”. Barclays, UBS and Goldman Sachs were among the 16 firms named by regulators.

The SEC issued statements about the fines totalling $1.1 billion, while the Commodity comings Trading Commission said it had imposed $710 million of penalties.

“Finance, ultimately, depends on trust. By failing to honour their recordkeeping and books-and-records obligations, the market participants we have charged today have failed to maintain that trust,” SEC chair Gary Gensler said.

It further said that from January 2018 through September 2021, bank workers routinely talked to their colleagues, clients and other third party advisers through apps on their personal devices, such as text messages and WhatsApp.

Most of those chats weren’t preserved either, violating federal rules that require broker-dealers and other financial institutions to keep records of business communications. In absence of records, regulators couldn’t ensure compliance with key rules and gather evidence in unrelated probes, the agencies said.

Some bankers have lost their jobs following the investigation. It has also forced companies to introduce tough new measures to stamp out unauthorised use of apps.

(With inputs from agencies)


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