The investigation at JPMorgan is ongoing, and the SEC has launched similar probes at firms across the financial universe.
That workaround picked up in popularity after two of the industry's biggest trading scandals of the past decade, involving manipulation of Libor and foreign exchange markets, hinged on incriminating messages preserved in chatrooms, resulting in multibillion-dollar fines for banks.Īt JPMorgan, the practice of going offline to communicate was firm-wide, and even the managers and senior personnel responsible for compliance used their personal devices to communicate sensitive business matters, the SEC said.
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While phone conversations and messages on official company devices and software platforms are preserved, it's much harder for bank compliance departments to surveil communications on third-party apps. Regulators in New York and London have ratcheted up enforcement of record-keeping rules recently as traders migrated to encrypted messaging platforms including WhatsApp, Signal or Telegram. Policing the use of unofficial channels became even more pressing when most of Wall Street went remote during the coronavirus pandemic. The move is the latest sign of an ongoing battle between regulators, banks and employees over the use of personal devices. SEC officials who spoke to reporters Thursday evening said JPMorgan's failure to preserve those offline conversations violated federal securities law and left the regulator blind to exchanges between the bank and its clients.įederal law requires financial firms to keep meticulous records of electronic messages between brokers and clients so regulators can make sure those firms aren't skirting anti-fraud or antitrust laws. Personal Loans for 670 Credit Score or Lower Personal Loans for 580 Credit Score or Lower Best Debt Consolidation Loans for Bad Credit
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