JPMorgan's $200 million in fines over employees' use of WhatsApp highlights Wall Street's ongoing war with messaging apps
JPMorganSecurities was fined for employees discussing business outside official channels.
- The bank received a total of $200 million in fines from the SEC and CFTC.
JPMorgan Securities, the broker-deal subsidiary of JPMorgan, agreed to pay $200 million in fines on Friday from two US regulators over issues related to employees' "widespread" use of unapproved communication methods like WhatsApp.
The Securities and Exchange Commission and the Commodity Futures Trading Commission fined JPMorgan $125 million and $75 million, respectively.
A spokesperson for JPMorgan declined to comment on the fines.
According to an SEC press release announcing the fines, JPMorgan Securities admitted that from January 2018 through November 2020 its employees discussed business matters on their personal devices via text messages, WhatsApp, and email.
The CFTC noted in its press release announcing the penalty that JPMorgan employees "including those at senior levels" communicated via text messages and WhatsApp dating back to at least July 2015.
Financial firms are required by regulators to keep a record of employee conversations related to business dealings. However, conversations that take place outside of approved channels make it difficult for firms' compliance teams to do so.
And while messengers like WhatsApp have long be a thorn in Wall Street's side, the pandemic exacerbated the problem.
In November 2020, Insider spoke with more than a dozen traders, compliance experts, tech providers and other market participants to learn more about the surge in WhatsApp use, how Wall Street firms are trying to stop it, and why traders keep getting caught in the fallout.
On Friday, the SEC acknowledged that the use of unapproved messengers was an industry problem that the agency would look deeper into.
"As a result of the findings in this investigation, the SEC has commenced additional investigations of record preservation practices at financial firms," the regulator said in its release.
Read more: Inside Wall Street's war on WhatsApp: Why traders just won't quit messaging apps, even as heads roll
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