Wall Street firms fined $1.8 billion by US watchdogs, over staff messages

The US financial watchdogs have fined a total of $1.8 billion to some of Wall Street's biggest companies after staff discussed trades and deals on their personal apps and devices.

According to the Securities and Exchange Commission, the investigation uncovered "pervasive off-channel communications". The regulators named 16 firms including, UBS, Goldman Sachs, and Barclays. The sweeping industry probe is a landmark case for the Commodity Futures Trading Commission and SEC. In a statement on Tuesday, the SEC announced that they fined the firms $1.1bn in total while the Commodity Futures Trading Commission said it had imposed penalties of $710m.

According to regulators, the bank workers routinely communicate with clients, colleagues, and other third-party advisers about business matters using apps on their personal devices such as WhatsApp and text message, from January 2018 through September 2021. Most of those chats were not preserved by the firm and it violated federal rules that required broker-dealers and other financial institutions to preserve the records of business communications.

The investigation by SEC and CFTC has shaken Wall Street and some bankers even lose their jobs. It has forced companies to introduce tough new measures to stamp out unauthorized use of apps.