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Wall Street Companies Fined $1.8bn Over Messages.

Some of the biggest companies on Wall Street have been fined a total of $1.8bn (£1.7bn) by US financial watchdogs as staff talked about deals and trades on their personal devices and apps.

According to the Securities and Exchange Commission (SEC), the investigation brought to the fore “pervasive off-channel communications.”

Barclays, UBS, and Goldman Sachs are among the 16 firms listed by regulators in the sweeping industry probe. This is a landmark case for the SEC and the Commodity Futures Trading Commission (CFTC). While the former levied fines totaling $1.1 bn, the latter imposed $710m of penalties.

SEC chair Gary Gensler said, “finance, ultimately, depends on trust.” He further added that the market participants have failed to honor their recordkeeping and books-and-record obligations and broke that trust.

Right from January 2018 through September 2021, bank workers kept communicating business matters with colleagues, clients, and other third-party advisors routinely. This communication was carried out on their personal devices, such as text messages and WhatsApp.

The firms deleted most of those chats, which violated federal rules requiring broker-dealers and other financial institutions to preserve business communication records. This did not allow regulators to ensure compliance with key rules and gather evidence in unrelated probes.

The investigation has created turmoil on Wall Street; some bankers even lost their jobs. The companies were forced to levy tough new measures to stamp out unauthorized use of apps.

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