Wall Street hit with latest wave of fines in SEC WhatsApp probe
A fresh slate of Wall Street firms agreed to collectively pay tens of millions of dollars to U.S. regulators over their employees’ use of unmonitored communication channels on the job.
The Securities and Exchange Commission said Friday that the firms, including Interactive Brokers Group Inc. and Robert W. Baird & Co. Inc., had broken rules that require employees’ business communications to be saved. In all, the companies agreed to pay $79 million in SEC penalties, according to the regulator.
Financial firms are required to monitor and save communications involving their business to head off improper conduct. Friday’s penalties add to to the more than $2.5 billion that big banks previously agreed to pay the SEC and the Commodity Futures Trading Commission to settle similar investigations into use of text messages on personal phones and WhatsApp.
Regulators say it is significantly harder to investigate wrongdoing when firms fail to save records. Gurbir Grewal, the SEC’s enforcement director, has made companies’ record-keeping lapses a priority since he took office in 2021.
In the two largest SEC fines announced Friday, Interactive Brokers and an affiliate will pay $35 million, while Baird will pay $15 million, the SEC said. William Blair & Co., Nuveen, Fifth Third Bancorp, and Perella Weinberg Partners also agreed to pay smaller multimillion-dollar fines.
Interactive Brokers also agreed to pay the CFTC $20 million to resolve the futures regulator’s probe into its communication practices.
“It was well known within these institutions that their internal policies were being flagrantly violated in practice. But no one stopped it,” Christy Goldsmith Romero, a Democratic CFTC commissioner, said ina statement.
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