Nearly a dozen Wall Street banks including Goldman Sachs, Deutsche Bank and Bank of America have been fined a total of $710 million for not keeping better records of texts and messages from WhatsApp and Signal sent by their employees.
The Commodity Futures Trading Commission said Tuesday it will fine 11 financial institutions between $6 million and $100 million each for failing to maintain, maintain or produce records that employees send to each other or to customers. Some messages were sent from personal devices for work communications.
American bank (buck) The largest fine is $100 million while Cantor Fitzgerald’s fee is only $6 million.
The CFTC said the civil fines were imposed because banks “failed for many years to prevent their employees, including those at senior levels, from communicating internally and externally using unapproved means of communication, including messages sent via personal text messages, WhatsApp or Signal.”
Financial institutions are required to keep these written communications as they pertain to businesses as registered with the CFTC.
These banks did not keep and maintain these letters and were not able to submit them to the CFTC.
Committee Chairman Rustin Behnam said the committee’s record-keeping and oversight requirements ensure the safety and integrity of US derivatives markets and protect customers and market participants. “As explained today, the Commission will vigorously pursue and hold registrants who fail to comply with their essential regulatory obligations and hold them accountable.”
Fines were assessed on the following banks:
- Bank of America: $100 million
- Barclays (BCS) : 75 million dollars
- Cantor Fitzgerald: $6 million
- City (c) : 75 million dollars
- Credit Suisse (CSGKF) : 75 million dollars
- German Bank (boroughs) : 75 million dollars
- Goldman Sachs (p) : 75 million dollars
- Jeffries: $30 million
- Morgan Stanley (Ms) : 75 million dollars
- Nomura: $50 million
- UBS: $75 million
โRecord-keeping requirements are key to the Commissionโs oversight of registrants and registrar disregard for its obligations threatens the Commissionโs ability to conduct examinations and investigations effectively and efficiently,โ said Acting Director of Enforcement, Gretchen Lowe. The Committee continues to focus on the importance of record keeping, oversight, and other regulatory obligations. Registrants and other market participants subject to federal commodity laws and regulations are encouraged to examine and supervise their internal controls for compliance.โ
The CFTC found the “widespread use of unapproved communication methods” in the internal policies and procedures of investment banks because they “generally prohibited business-related communications that occur via unapproved methods.”
Supervisors and managers who were responsible for ensuring compliance also sent letters that were not approved.
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