There are tons of platforms available for businesses worldwide to facilitate communication among employees. The most popular ones include Slack, but some companies can also use WhatsApp and iMessage, which are commonly used by everyone in their daily lives. Apparently, this situation has been banned for banks in the US.
US banks fined $549 million for using WhatsApp, iMessage, and Signal
The US Securities and Exchange Commission (SEC) has imposed a total of $549 million in fines on Wells Fargo and other banks for using personal end-to-end encrypted messaging applications such as WhatsApp, iMessage, and Signal to discuss internal business matters.
SEC cited that senior bank officials used personal iMessage, WhatsApp, and Signal accounts when making business-related decisions. In the US, the law requires publicly traded companies and banks to maintain auditable records of all business decisions and discussions, a regulation overseen by the SEC.
Malicious Android apps that steal users' banking data using Trojan horse techniques have been discovered on the Google Play Store.
Similar recording rules for trading decisions are also applied by the US Commodity Futures Trading Commission (CFTC). According to the SEC, the failure to record these conversations violates not only the recordkeeping rules of the Securities Exchange Act of 1934 but also the similar rules of the Investment Advisers Act of 1940.
Wells Fargo and other banks violated these rules due to conducting business-related discussions by senior bank officials on their personal phones, and thus, it’s claimed that the information in these sent messages couldn’t be recorded.
Since all three applications use end-to-end encryption, the content of the messages can only be accessed and read by the relevant managers by accessing their personal accounts. Additionally, messages can be lost in some cases when devices are changed. Due to all these factors, the following banks were fined the specified amounts by the SEC:
• Wells Fargo Securities, LLC, Wells Fargo Clearing Services, LLC, and Wells Fargo Advisors Financial Network, LLC: $125 million
• BNP Paribas Securities Corp. and SG Americas Securities, LLC: $35 million each
• BMO Capital Markets Corp. and Mizuho Securities USA LLC: $25 million each
• Houlihan Lokey Capital, Inc.: $15 million
• Moelis & Company LLC and Wedbush Securities Inc.: $10 million each
• SMBC Nikko Securities America Inc: $9 million
Ukrainian hackers claim responsibility for attacking Infotel JSC, a Russian telecom company linked to the country's banking infrastructure.
The banks fined by the CFTC are as follows:
• BNP Paribas (BNP Paribas S.A. and BNP Paribas Securities Corp.): $75 million
• Société Générale (Société Générale SA and SG Americas Securities, LLC): $75 million
• Wells Fargo (Wells Fargo Bank NA and Wells Fargo Securities LLC): $75 million
• Bank of Montreal: $35 million
What are your thoughts on this law? Do publicly traded companies like this really need to have auditable internal communication? Please remember to share your thoughts in the comments section!
We want to keep you updated with notifications.