On Capitol Hill in Washington, on September 15, 2022, U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler testifies before the Senate Banking, Housing and Urban Affairs Committee during an oversight hearing.
On Tuesday, U.S. regulators imposed $549 million in penalties on Wells Fargo and several smaller or non-U.K. companies for failing to maintain electronic records of employee communications.
The Securities and Exchange Commission disclosed that 11 companies were penalized with $289 million for their “widespread and longstanding failures” in record-keeping, and the Commodity Futures Trading Commission fined four banks $260 million total for not maintaining records required by the agency.
The regulators’ latest endeavor is to eliminate the widespread use of secure messaging apps like Signal, Meta, and iMessage by Wall Street employees and managers. Starting in late 2021, they have reached settlements with major players such as JPMorgan Chase, Goldman Sachs, Morgan Stanley, or Citigroup, resulting in fines exceeding $2 billion.
Sanjay Wadhwa, deputy director of enforcement at the SEC, stated in the release that today’s actions are part of our ongoing efforts to ensure that regulated entities, such as broker-dealers and investment advisers, comply with their recordkeeping requirements, which are crucial for monitoring and enforcing compliance with federal securities laws.
The SEC reported on Tuesday that the firms admitted to using side channels like WhatsApp to discuss company business from at least 2019, and also acknowledged their failure to comply with federal securities laws by not preserving records.