Five of America’s biggest investment banks are preparing to pay a combined $1 billion in fines for letting their workers use unauthorized messaging apps.
As Bloomberg News reported Friday (July 15), Morgan Stanley is preparing to pay a $200 million fine, the same amount JPMorgan Chase has already paid.
Meanwhile, Citigroup, Goldman Sachs and Bank of America are also in discussions to pay a similar fine to regulators, sources told Bloomberg.
New York-based Citigroup took a one-time reserve for the investigation, Chief Financial Officer Mark Mason said Friday on an earnings call, calling it “appropriate” and “aligned with what our peers have disclosed.”
And Morgan Stanley said its fine was “related to a specific regulatory matter concerning the use of unapproved personal devices and the firm’s record-keeping requirements.”
The Bloomberg report notes that the billion-dollar figure is an unusual escalation from regulators in a case like this, as fines have typically been much lower.
Financial companies are required to closely monitor business communications, but that the system was hampered by the rise of mobile messaging apps and employees working from home during the COVID pandemic.
The Commodities Futures Trading Commission (CFTC) and Securities and Exchange Commission (SEC) fined JPMorgan Chase & Co for $200 million last December after learning that bank staff had been sending work-related information using messaging platforms like WhatsApp or personal emails.
And earlier this year, the CFTC opened an investigation into London banking giant HSBC over the company’s bankers’ alleged use of “non-HSBC approved messaging platforms.”
In May, German financial watchdog BaFin ordered Deutsche Bank to clarify how its staff uses private messages on WhatsApp for business purposes.
As PYMNTS reported at the time, senior bank executives have used WhatsApp, other messaging tools and private email accounts to conduct business.