Banks Fined $549 Million for Conducting Business Via iMessage, Signal, and WhatsApp

Wes Davis, reporting for The Verge:

Several US financial firms, including multiple Wells Fargo companies, will pay a combined $549 million in fines after admitting they couldn’t produce discussions about 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) fined banks for being unable to produce discussions going back to at least 2019. The regulators say employees used their personal devices to discuss official company business via apps like iMessage, WhatsApp, or Signal and that those “off-channel communications” weren’t “maintained or preserved.”

Not keeping records of those conversations violates the 1934 Securities Exchange Act’s recordkeeping rules, as well as similar rules from the Investment Advisers Act of 1940, according to the SEC. The CFTC maintains its own recordkeeping requirements, which it says were violated.

My first thought was, “I’ll bet they regret using encrypted messaging for this.”

My second thought was, “But... depending on what they were discussing, maybe not?”

Sometimes paying a fine — even a stiff one — is a win.

★ Thursday, 10 August 2023