US regulators have reached settlements with dozens of banks in a broad investigation into the failure of global financial firms to monitor employee communications on unauthorized messaging apps. permits, bringing the total amount of fines in this matter to more than $2 billion.
The Securities and Exchange Commission announced $1.1 billion in fines, and the Commodity Futures Trading Commission disclosed $710 million in fines in separate statements Tuesday. Those taxes – against companies include Bank of America Corp., Citigroup Inc. and Goldman Sachs Group Inc. – combined with JPMorgan Chase $200 million in fines by & Co. from December, bringing the total to $2.01 billion, making them the largest-ever penalty for US banks for record-keeping errors.
“Ultimately, finances depend on trust. By failing to comply with their record-keeping and book-and-record obligations, the market participants we charged today failed to maintain that trust.” Gary Gensler said in the agency’s statement. “As technology changes, it is more important for subscribers to properly conduct their communications on business matters only in official channels and that they maintain and keep that communication”.
Tuesday’s announcement limits monthly discussions between regulators and banks. Morgan Stanley said in July it was near a settlement that would cost it a $200 million fine, with other major banks also disclosing similar deductions as part of their second-quarter results without specifying a reason.
JPMorgan is the only bank to date to reach an agreement with regulators and was the first to report the fines in December. Regulators say even executives and supervisors Other senior executives at America’s largest bank have also evaded regulatory scrutiny by using services like WhatsApp or personal email addresses for work-related communications.
Financial companies are required to carefully monitor their business-related communications to prevent improper conduct. That system, already challenged by the proliferation of mobile messaging apps, became increasingly strained as companies sent workers home shortly after the start of the Covid-19 outbreak.
During the SEC investigation, eight companies agreed to a $125 million fine each: Barclays Plc, Bank of America, Citigroup, Credit Suisse Corporation AG, Deutsche Bank AG, Goldman Sachs, Morgan Stanley and UBS Group CHILDHOODS. Jefferies Financial Group Inc. and Nomura Holdings Inc. agreed to pay $50 million each, and Cantor Fitzgerald LP agreed to pay $10 million.
Bank of America had the largest CFTC fine, with $100 million, followed by Barclays, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, Morgan Stanley and UBS with $75 million each. Nomura was fined $50 million, Jefferies $30 million and Cantor Fitzgerald $6 million.
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