Banks were reportedly fined for hiding messages in iMessage and Signal. Wells Fargo as well as other Wall Street companies snuck around and found out, and they ended up paying severely for it.
Banks Fined for Hiding Messages
Many US financial companies, which is inclusive of multiple Wells Fargo companies, will reportedly pay a combined $549 million in fines after reportedly admitting they could not produce discussions regarding company business from smartphone messaging apps that are used by their employees, “including those at senior levels.”
Both the Securities and Exchange Commission (SEC) as well as the Commodity Futures Trading Commission (CFTC) fined several banks for being unable to produce discussions going back to at least 2019. The regulators in question say that employees made use of their personal devices in discussing official company business through apps such as iMessage, WhatsApp, or Signal and that those “off-channel communications” were not “maintained or preserved.”
The 1934 Securities Exchange Act’s Recordkeeping Rules
Not keeping records of those very conversations in question violates the 1934 Securities Exchange Act’s recordkeeping rules, as well as other similar rules from the Investment Advisers Act of 1940, as per the SEC. The CFTC as you should know maintains its own recordkeeping requirements, which it says were reportedly violated.
Wells Fargo Companies Took the Biggest Chunk of the Fines
The biggest chunk of the whole fines goes to the Wells Fargo companies, which together will pay a total sum of almost half of the SEC’s penalties at $125 million, along with another reported $75 million settlement with the CFTC.
“Here are three takeaways for those firms who haven’t yet done so: self-report, cooperate and remediate,” SEC enforcement director Gurbir S. Grewal stated. “If you adopt that playbook, you’ll have a better outcome than if you wait for us to come calling.”
The Full List of Banks and Their Settlements with the SEC
Here is a list of the banks and their settlements with the Securities and Exchange Commission (SEDC);
- Wells Fargo Securities, LLC, together with Wells Fargo Clearing Services, LLC and Wells Fargo Advisors Financial Network, LLC, agreed to pay a $125 million penalty;
- BNP Paribas Securities Corp. and SG Americas Securities, LLC have each agreed to pay penalties of $35 million;
- BMO Capital Markets Corp. and Mizuho Securities USA LLC have each agreed to pay penalties of $25 million;
- Houlihan Lokey Capital, Inc. has agreed to pay a $15 million penalty;
- Moelis & Company LLC and Wedbush Securities Inc. have each agreed to pay penalties of $10 million; and
- SMBC Nikko Securities America, Inc. has agreed to pay a $9 million penalty.
The list from the CFTC release;
- BNP Paribas (BNP Paribas S.A. and BNP Paribas Securities Corp.): $75 million
- Société Générale (Société Générale SA and SG Americas Securities, LLC): $75 million
- Wells Fargo (Wells Fargo Bank NA and Wells Fargo Securities LLC): $75 million
- Bank of Montreal (Bank of Montreal): $35 million
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