Illegal WhatsApp app continues to haunt US banks

Illegal WhatsApp app continues to haunt US banks

The Securities and Exchange Commission has fined Wells Fargo and BNP Paribas millions for misuse of WhatsApp.

A total of 11 companies were sued for “pervasive and persistent” failure to maintain and secure electronic communications. In total, the banks will have to cough up $289 million. Wells Fargo gets the biggest fine: $125 million.

This is not the first time the US regulator has issued such fines. In September last year, eleven US investment banks (including Bank of America, Citi and Goldman Sachs) were sanctioned for similar incidents.

According to the SEC, it is standard practice at many banks for executives to issue text messages on their personal phones. Those messages must be stored so that a regulator can request them for investigation, for example insider trading. Using WhatsApp and similar communication services to discuss banking matters is against the rules.

In total, the regulatory authority has handed out more than $1.5 billion in fines for such offenses in one year, and it’s not stopping there. SEC Chairman Gurbir Grewal warns that more companies are in his sights.

Banks that have yet to improve their communication practices, according to Grewal, would do well to report, collaborate and correct themselves. “If you follow that script, you’ll get a better ‘end’ than what we came to you with.”

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