The use of WhatsApp and messaging record-keeping failures: the massive fines keep coming

On 8 August 2023, penalties for record-keeping failures of $549 million were ordered against 10 banks, broker-dealers and investments advisers in the U.S.  The Commodity Futures Trading Commission (CFTC) ordered four banks to pay $260 million for record-keeping and supervision failures arising from the use of unapproved messaging systems including personal texts and WhatsApp.  On the same day, the Security Exchange Commission (SEC) also announced it had settled actions against 6 banks, broker-dealers and investment advisers it had been investigating for failures to comply with record-keeping requirements with penalties of $289 million.  There have been in recent years, 30 enforcement actions by the SEC and over $2 billion in penalties ordered for record-keeping violations.  These violations stemmed from employees communicating through messaging platforms on their personal devices, including WhatsApp, iMessage and Signal about the business of their employer.  While these messaging platforms may not have been sanctioned for use by […]