WhatsApp Probe: Overview
The US Securities and Exchange Commission (SEC) has imposed fines totaling approximately $393 million on twenty-six financial firms for failing to preserve employees’ electronic communications. This action is part of the ongoing fallout from the SEC’s investigations into the use of personal messaging apps like WhatsApp for business communications.
Key Fines and Settlements
- Ameriprise Financial Inc.: $50 million
- Edward D. Jones & Co.: $50 million
- LPL Financial Holdings Inc.: $50 million
- Raymond James Financial Inc.: $50 million
- Royal Bank of Canada: $45 million
- Toronto-Dominion Bank, Truist Financial Corp., and Bank of New York Mellon Corp.: Additional penalties also levied on these firms.
These fines address the firms’ failures to comply with federal securities laws, specifically the requirement to maintain and monitor electronic communications that involve their business operations.
Regulatory Perspective
Gurbir Grewal, Director of the SEC’s Enforcement Division, emphasized the importance of compliance with books and records requirements for investor protection and market integrity. The SEC’s enforcement actions reflect its ongoing commitment to ensuring that financial institutions adhere to regulations designed to prevent misconduct.
Broader Context
This latest round of penalties follows a series of similar investigations and settlements. Previously, large banks have faced billions in fines from both the SEC and the US Commodity Futures Trading Commission (CFTC) related to the use of personal phones and messaging apps for business communications. Financial firms are obligated to retain records of such communications to safeguard against potential misconduct.
These enforcement actions underscore the SEC’s focus on ensuring transparency and accountability in the financial sector, aiming to uphold the integrity of financial markets and protect investors.
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