Apps like WhatsApp, iMessage, and Signal have become essential in our lives. We like them not just because they’re easy to use and popular, but also because they’re secure and can’t be easily monitored from the outside. But sometimes, privacy might not always be a good thing, especially when used by bank managers. Several US financial companies are being fined a total of $549 million because they couldn’t show company chats from apps like iMessage and Signal. Here are the details…
Banks fined $549 million for hiding messages in iMessage and Signal
Several US financial firms, including Wells Fargo, have been fined $549 million by the Securities and Exchange Commission (SEC) for using encrypted messaging apps like Signal and iMessage to hide messages about company business. The SEC found that the firms failed to preserve these messages as required by law, which could have prevented regulators from investigating potential wrongdoing.
The SEC’s investigation began in 2019, after a whistleblower reported that some financial company employees were using encrypted messaging apps to discuss sensitive topics, such as regulatory compliance and customer complaints. The SEC’s investigation found that Wells Fargo employees used iMessage and Signal to send and receive messages about a variety of topics, including:
- Bankruptcies
- Trading strategies
- Customer complaints
- Regulatory compliance
- Hiring decisions
The SEC found that failure to preserve these messages was a violation of the federal securities laws, which require companies to keep records of all communications about their business. The SEC also found that this financial companies use of encrypted messaging apps created a “culture of secrecy” that discouraged employees from reporting potential wrongdoing.
In addition to Wells Fargo, the SEC also fined BNP Paribas, BNY Mellon, and Morgan Stanley for failing to preserve messages from encrypted messaging apps. The SEC’s actions send a message to all financial firms that they must comply with the law and preserve all records of their business communications, regardless of the platform they are using. Here’s the full list of banks and their settlements with the SEC:
| Company Name | Penalty Amount |
|---|---|
| Wells Fargo Securities, LLC | $125 million |
| BNP Paribas Securities Corp. | $35 million |
| SG Americas Securities, LLC | $35 million |
| BMO Capital Markets Corp. | $25 million |
| Mizuho Securities USA LLC | $25 million |
| Houlihan Lokey Capital, Inc. | $15 million |
| Moelis & Company LLC | $10 million |
| Wedbush Securities Inc. | $10 million |
| SMBC Nikko Securities America, Inc. | $9 million |
| BNP Paribas S.A. | $75 million |
| Société Générale SA | $75 million |
| Wells Fargo Bank NA | $75 million |
| Bank of Montreal | $35 million |
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(via)
