Wall Street to pay hundreds of millions more for WhatsApp use

investmentnews.com:

Wells Fargo & Co. and BNP Paribas are among firms that will pay hundreds of millions of dollars total in penalties for employees using unofficial communications like WhatsApp to conduct business — the latest salvo in U.S. regulators’ crackdown on how Wall Street keeps records.

Wells Fargo units agreed to pay $125 million to the Securities and Exchange Commission and BNP will pay $35 million, the regulator said Tuesday. Meanwhile, the two lenders will pay $75 million each over similar violations by their derivatives brokerage units, the Commodity Futures Trading Commission said.

In all, the CFTC announced penalties of $260 million, while the SEC said that firms had agreed to pay it $289 million.

Over the past several years, the SEC and CFTC have beencracking down on firms skirting regulatory scrutiny by using services such as WhatsApp or personal email addresses for work-related communications. Finance firms are required to scrupulously monitor communications involving their business to head off improper conduct.

Regulators have said that failing to properly archive messages can make it harder to investigate wrongdoing.

On Tuesday, the SEC said that its investigation “uncovered pervasive and longstanding off-channel communications” at 11 firms. As part of the settlements, the companies admitted that their employees had used platforms like iMessage, WhatsApp and Signal to talk business. The companies didn’t maintain sufficient records, according to the SEC. The CFTC said it found similar violations.

Other notable firms that agreed to settle on Tuesday included units of Bank of Montreal, Mizuho Financial Group and Societe Generale.

The actions follow a string of similar high-profile cases released last September. At the