CIBC and two other firms pay millions to settle U.S. WhatsApp probes

financialpost.com:

U.S. regulators levied more than US$118 million in penalties against several financial firms for failing to keep employees’ electronic communications, the latest fallout from the so-called WhatsApp investigations.

The largest penalty, totalling US$42 million, was paid by Canadian Imperial Bank of Commerce and two of its affiliates, according to statements by the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). Stifel, Nicolaus & Co. agreed to pay US$35 million to the SEC, as did Invesco Distributors and Invesco Advisers.

The firms admitted the facts and have begun making internal changes, according to both the SEC and CFTC.

“Today’s enforcement actions reflect the range of remedies that parties may face for violating the recordkeeping requirements of the federal securities laws,” Gurbir Grewal, director of the SEC’s enforcement division, said in a statement Tuesday. “Widespread and longstanding failures, including where those failures potentially hinder the Commission’s investor protection function by compromising a firm’s response to SEC subpoenas, may result in robust civil penalties.”

Financial firms are required to monitor and save communications involving their business to head off improper conduct. Tuesday’s penalties add to the more than US$2.5 billion that big banks previously agreed to pay the SEC and the CFTC to settle similar investigations into use of text messages on personal phones and WhatsApp.

“We respect the decisions of the SEC and CFTC on these matters,” a spokesperson for the bank said in a statement. “Throughout this process, CIBC offered its full co-operation to both regulators and took immediate steps to implement remedies internally.”

Lawyers for Stifel