Morgan Stanley (NYSE:MS) has been fined millions of pounds by regulator Ofgem after the bank’s energy traders failed to record discussions over wholesale market transactions, held on WhatsApp.
Having failed to record and retain communications on the app between January 2018 and March 2020, the bank was fined £5.4 million – reduced from £7.7 million for cooperation.
"It is unacceptable that Morgan Stanley (NYSE:MS) failed to prevent electronic communications which could not be recorded or retained,” Ofgem enforcement director Cathryn Scott said.
“It risks a significant compromise of the integrity and transparency of wholesale energy markets.”
According to Ofgem, Morgan Stanley (NYSE:MS) had policies in place barring the use of WhatsApp for trading communications but failed to implement them.
Billions of pounds worth of energy is traded on the wholesale market each year, with contracts changing hands several times before the power is ultimately sold to customers.
The selling value of electricity and gas for UK customers sat at £59.8 billion and £46.7 billion respectively in 2022, according to Statista.
In the first quarter of this year, Morgan Stanley scored almost US$4.5 billion in revenue from trading, up 12% on last year, though this does also include other commodities.
Ofgem’s fine marks the first for failing to record energy trading communications.