(Investopedia) - How much does it cost to send a text message? For 11 trading firms, the practice of their employees texting about work on their personal devices has cost a combined $549 million in fines from federal regulators.
KEY TAKEAWAYS
- Wells Fargo and other Wall Street trading firms have agreed to pay $549 in fines to federal regulators for violating rules that require them to preserve electronic communications.
- Company employees used personal devices to send work-related text messages, making communications less available for investigators looking into potential wrongdoing, the Securities and Exchange Commission said.
- The fines are part of an ongoing effort by federal regulators to make financial companies comply with communications rules: last year, other major firms had to pay nearly $2 billion for similar violations.
The Securities and Exchange Commission (SEC) and the Commodities Futures Trading Commission (CFTC) said Tuesday the companies had agreed to pay a a total of $549 million in fines to settle charges that they had violated recordkeeping rules. Longstanding patterns of employees communicating about work on personal devices on iMessage, WhatsApp, Signal, and other text messaging services violated regulations, the SEC said.12
Among the firms targeted: Wells Fargo (WFC), which was fined $200 million by SEC and CFTC combined, and BNP Paribas (BNPQY), which faced $110 million in fines between the two regulators.
Trading firms are required to preserve electronic communications so that regulators can investigate potential lawbreaking. In September, the SEC and CFTC leveled nearly $2 billion in fines against 16 other companies, including Bank of America (BAC) and Goldman Sachs (GS), for similar violations.
“Today’s actions stem from our continuing sweep to ensure that regulated entities, including broker-dealers and investment advisers, comply with their recordkeeping requirements, which are essential for us to monitor and enforce compliance with the federal securities laws.” Sanjay Wadhwa, Deputy Director of Enforcement for the SEC, said in a statement. “Recordkeeping failures such as those here undermine our ability to exercise effective regulatory oversight, often at the expense of investors,”
Firms Fined By The SEC:
- Wells Fargo Securities with Wells Fargo Clearing Services, and Wells Fargo Advisors Financial Network: $125 million
- BNP Paribas Securities: $35 million
- SG Americas Securities: $35 million
- BMO Capital Markets: $25 million
- Mizuho Securities USA: $25 million
- Houlihan Lokey Capital: $15 million
- Moelis & Company: $10 million
- Wedbush Securities: $10 million
- SMBC Nikko Securities America: $9 million
Firms Fined By The CFTC:
- BNP Paribas S.A. and BNP Paribas Securities: $75 million
- Société Générale SA and SG Americas Securities: $75 million
- Wells Fargo Bank and Wells Fargo Securities: $75 million
- Bank of Montreal (BMO): $35 million
By Diccon Hyatt
