Wall Street WhatsApp Probe: The SEC is about to deal with around twenty Wall Street companies. The SEC has been battling Wall Street’s illegal use of messaging services like WhatsApp for two years. These deals with brokers and advisers are the next front in that fight. This attack on regulations has resulted in fines exceeding $2 billion.
In the upcoming SEC deals, accused companies must admit guilt and pay fines. The settlements need an agreement to address these violations. This process is overseen by consultants hired to change how they keep records. There are reports that some groups could face fines of up to $50 million.
With the fiscal year ending on September 30, the SEC may announce these agreements in one statement. Another source familiar with the case says the schedule remains to be determined due to complex negotiations.
Due to the sensitivity of SEC investigations, unnamed sources have revealed that around twenty firms are involved.
Regulatory filings reveal that the SEC investigated at least 16 broker-dealers and investment advisers for their contacts. The companies include Truist Financial Corp. (TFC.N), US Bancorp. (USB.N), Voya Financial Inc. (VOYA.N), LPL Financial (LPLA.O), Interactive Brokers, and Oppenheimer (OPY.N).
In an SEC filing on August 7, Fifth Third Bancorp (FITB.O) disclosed involvement in settlement talks and expressed confidence in the impact on its finances.
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Despite repeated requests, the SEC, Fifth Third, LPL, US Bancorp, Truist, Oppenheimer, and Interactive Brokers stay silent. Voya’s silence suggests most people are shy.
The SEC has been involved in past group settlements, playing out in this episode. This demonstrates its close monitoring of off-channel contacts. The agency has taken 30 enforcement steps, including legal actions against business groups.
Nine Wall Street firms, including Wells Fargo and Societe Generale, were fined $549 million in August for their workers’ unauthorized use of personal messaging apps. The following month, 16 companies, including Goldman Sachs, Morgan Stanley, Citigroup, and Bank of America, were fined $1.8 billion for similar wrongdoings.
The SEC is investigating texts and emails from over a dozen financial managers, including those from private equity and hedge funds. This step demonstrates the SEC’s commitment to uncovering business conversations on personal messaging platforms. This violates the SEC’s rule on recording business contacts.
The SEC’s ongoing probe started in 2021 after JPMorgan Chase (JPM.N) declined to provide necessary information for another investigation. This led to questionable record-keeping on Wall Street. This mistake resulted in a 2021 settlement where the world’s largest bank paid $125 million for record-keeping errors.
Our Reader’s Queries
What is the WhatsApp probe?
The US SEC is broadening its inquiry into Wall Street’s utilization of private messaging apps. The agency is now collecting staff messages from more than a dozen major investment firms. The investigation, which was initially centered on broker-dealers, is now seeking to uncover any possible breaches of record-keeping regulations.
What is the SEC fine for WhatsApp?
The SEC’s ongoing crackdown on Wall Street’s use of unapproved messaging apps like WhatsApp has resulted in over $2 billion in fines. The latest enforcement action targets broker-dealers and investment advisers, with settlements expected to be reached soon. This is part of the SEC’s efforts to ensure that financial professionals are using approved communication channels to protect investors and maintain transparency in the industry.
What was the fine for William Blair?
The SEC has imposed hefty fines on two firms. William Blair & Company LLC has been fined $10 million, while Nuveen Securities LLC has been slapped with an $8.5 million penalty.