/cdn.vox-cdn.com/uploads/chorus_asset/file/24838577/1513216919.jpg "Banks fined 9 million for hiding messages in iMessage and Signal")
Several financial firms in the US, including multiple Wells Fargo companies, are set to face fines totaling $549 million. These fines come after the firms admitted their inability to produce discussions regarding company business from smartphone messaging apps used by their employees, including those at senior levels. Both the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) imposed fines on the banks for their failure to produce discussions dating back to at least 2019. According to the regulators, employees used personal devices to discuss official company business through apps like iMessage, WhatsApp, or Signal, and these “off-channel communications” were not maintained or preserved.
The SEC states that the failure to keep records of these conversations violates the recordkeeping rules of the 1934 Securities Exchange Act and similar rules from the Investment Advisers Act of 1940. The CFTC also asserts that its own recordkeeping requirements were violated.
The largest portion of the fines will be paid by the Wells Fargo companies, amounting to $125 million for the SEC penalties and an additional $75 million settlement with the CFTC.
SEC enforcement director Gurbir S. Grewal emphasizes three key takeaways for firms that have not yet addressed this issue: self-report, cooperate, and remediate. By following this playbook, firms can achieve better outcomes compared to waiting for regulatory intervention.
For a comprehensive list of banks and their settlements with the SEC, please refer to the following:
And here is the list provided by the CFTC in their release.
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Alex Smith is a writer and editor with over 10 years of experience. He has written extensively on a variety of topics, including technology, business, and personal finance. His work has been published in a number of magazines and newspapers, and he is also the author of two books. Alex is passionate about helping people learn and grow, and he believes that writing is a powerful tool for communication and understanding.
