The US Securities and Exchange Commission (SEC) has confirmed that 16 major Wall Street firms have agreed to pay a combined penalty of $1.1bn over recordkeeping violations.     

The development follows a major inquiry taken up by the SEC last year to monitor if the Wall Street banks are keeping a tab on their employees’ work-related communications.   

In its latest statement, the SEC pointed to “widespread and longstanding failures by the firms and their employees to maintain and preserve electronic communications”.

As per the agency, between January 2018 and September 2021, the banks’ employees exchanged details regarding debt and equity deals with colleagues, clients and advisers through WhatsApp and other applications on their personal devices.

Employees at various levels of authority including supervisors and senior executives were reportedly involved in such practices.

The entities did not preserve business communications, violating federal rules.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

According to the SEC, eight firms with five affiliates including Barclays Capital, Citigroup Global Markets, Credit Suisse Securities (USA), Goldman Sachs and Morgan Stanley have agreed to pay $125m each.

The firms also agreed to keep compliance consultants to hold reviews of their policies and procedures in connection to electronic communications.

Meanwhile, UBS Securities, Morgan Stanley and Citi said the banks have settled the issue, reported Reuter citing their spokespeople.

SEC Division of Enforcement director Gurbir S Grewal said: “Today’s actions – both in terms of the firms involved and the size of the penalties ordered – underscore the importance of recordkeeping requirements: they’re sacrosanct.

“If there are allegations of wrongdoing or misconduct, we must be able to examine a firm’s books and records to determine what happened.” Reuters, quoting Commodity Futures Trading Commission Commissioner Christy Goldsmith Romero, said: “Those choosing to participate in US financial markets are on notice: the era of evasive communications practices is over.”