Barclays PLC (LSE:BARC), Goldman Sachs (NYSE:GS) and Credit Suisse were among a host of companies fined by the US regulator for traders' use of their phones for work communication, and not properly maintaining and preserving electronic communications.
Bank of America Corp (NYSE:BAC), Citigroup Inc (NYSE:C), Morgan Stanley (NYSE:MS) and UBS were among the others fined by the regulator for a combined total of US$1.1bn.
From January 2018 to September 2021, the banks’ employees communicated about business matters using applications such as text messages and WhatsApp on their personal devices.
The SEC found this was in violation of its rules for preserving business-related communications, as it would be difficult to gather evidence from apps like WhatsApp for its investigations.
“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,” said Gurbir Grewal, director of the SEC’s enforcement division.
“If there are allegations of wrongdoing or misconduct, we must be able to examine a firm’s books and records to determine what happened,” he added.
Rule violations were made across 16 companies in total, and involved employees are varying levels of authority, the SEC said.