Big U.S. banks are in the crosshairs of the federal government for using unapproved messaging tools and are facing more than $1 billion in regulatory fines following probes by the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).
Banks including JPMorgan Chase and Co., Bank of America, Morgan Stanley, and Citi have already paid or will pay for their employees’ use of questionable communication channels such as email and WhatsApp. The SEC began looking into banks’ record-keeping practices last year.
JPMorgan’s broker-dealer subsidiary was fined $200 million last year for failing to retain staff communications on personal devices, apps, and emails, violating securities laws. Morgan Stanley will also pay $200 million, and Bank of America has set aside the same amount for legal fees associated with lawsuits addressing employees’ unauthorized electronic messaging, according to the banks’ disclosures.
The SEC is also investigating Citi for communicating over unapproved channels, the bank reported, and Goldman Sachs said it is in “advanced discussions” with the SEC and CFTC to resolve its issues.
Beyond the U.S., British bank Barclays will also pay $200 million, and Credit Suisse Group AG has designated the same amount for litigation relating to record-keeping policies. Meanwhile, Germany’s Deutsche Bank announced in July that it has set aside $165 million euros for potential regulatory enforcement.
