The US SEC investigates Wall Street over use of unapproved messaging apps

The US SEC investigates Wall Street over use of unapproved messaging apps
FILE PHOTO: The seal of the U.S. Securities and Exchange Commission (SEC) is seen at their headquarters in Washington, D.C., U.S., May 12, 2021. REUTERS/Andrew Kelly

The Securities and Exchange Commission (SEC) in the US is looking into over 100 personal cell phones used by top traders and bankers on Wall Street to find out if they were using illicit and unapproved messaging apps, like WhatsApp, to make under-the-radar business decisions, according to a report by Bloomberg.

This whole search was sparked when JP Morgan was fined US$200 million for failing to monitor business-related messages on these kinds of messaging platforms. Now, the SEC is trying to figure out who else is doing the same thing and how much they should be fined for it.

Naturally, Wall Streeters are freaking out a bit. Still, there is one small comfort that may make them feel better – ugly texts about bosses or coworkers likely won’t be considered “business-related.” The whole search is being done through third party lawyers who will only make illegal messages public.

Key comments:

“Unfortunately, in the past we’ve seen violations in the financial markets that were committed using unofficial communications channels,” said SEC Chair Gary Gensler when the JP Morgan debacle was unfolding.

“The firm is cooperating with the SEC and CFTC and is producing documents in connection with investigations of the firm’s compliance with records preservation requirements relating to business communications sent over electronic messaging channels that have not been approved by the firm,” said Goldman Sachs in recent quarterly filings.