Fines for Wall St. communications violations reach $2.5B
Wells Fargo & Co. and BNP Paribas SA are among firms that will pay hundreds of millions of dollars in penalties for employees using unofficial communications like WhatsApp, personal texts or email to conduct business — the latest in US regulators’ crackdown on Wall Street’s failure to keep records.
Three Wells Fargo units agreed to pay a total of $125 million to the Securities and Exchange Commission, and BNP will pay $35 million, the regulator said Tuesday. The two lenders will pay $75 million each over similar violations by their derivatives brokers, the Commodity Futures Trading Commission said.
In all, the CFTC announced penalties of $266 million on Tuesday, while the SEC said firms had agreed to pay it $289 million. Total fines for the probes into messaging practices have now crossed $2.5 billion since December 2021, making this one of the biggest financial enforcement efforts of the past decade.
What began as a look at trading desks’ use of chat apps has expanded into a look into all of finance’s use of any kind of communication tool that doesn’t save records appropriately. Hedge funds and private equity firms are also under investigation for their use of personal communication apps.
Wells Fargo spokesperson Laurie Kight said in a statement that the company was pleased to resolve the matter. BNP declined to comment.
SEC officials said they were well aware of other companies that weren’t complying. “So here are three takeaways for those firms who haven’t yet done so: self-report, cooperate and remediate,” said Gurbir Grewal, the SEC’s head of enforcement. “If you adopt that playbook, you’ll have a better outcome than if you wait for us to come calling.”
Tuesday’s slate of penalties is nowhere near the end of
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