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Financial watchdogs want to know what traders are talking about on WhatsApp

Keen interest in messaging platform follows $2 billion fines in US

Authorities in the US and the UK are taking a keen interest in the contents of WhatsApp messages among bank employees and their associates in the financial services industry.

The UK's Financial Conduct Authority (FCA) is set to probe sector workers' use of private messaging services as the watchdog increases scrutiny in line with the US.

According to Bloomberg, the FCA has requested information from Citigroup, Deutsche Bank, JPMorgan Chase, and Nomura Holdings, among others, inquiring about the frequency and content of staff exchanges through texting and messaging apps.

In an email to The Register, an FCA spokesperson explained: "We are actively discussing personal device use with a range of UK authorized firms, not limited to those who may have been subjected to other regulatory enquiries. We are unable to comment on firm-specific supervisory issues at this stage."

In September, 11 of the world's most powerful financial firms were fined nearly $2 billion for off-channel comms. Banking giants including Goldman Sachs, Credit Suisse, and Citigroup agreed to pay $1.1 billion in penalties to the SEC and $710 million in fines to the Commodity Futures Trading Commission (CFTC) in separate actions for failing to monitor and stop their workers from using unauthorized messaging apps.

The action followed months of wrangling between federal regulators and the banks, culminating in fines many have criticized as being too small to be a real deterrent.

The FCA is not new to sanctions based on WhatsApp communications, though. In 2017, it fined Christopher Niehaus, a former investment banker, £37,198 for sharing confidential client information over WhatsApp.

The watchdog found Niehaus, at the time a managing director at Jefferies International, used the messaging app to receive sensitive information in 2016 and shared it with both a personal acquaintance and a friend who was also a client of the company.

In the United States, the Securities and Exchange Commission (SEC) looks set to expand its interest in traders' work-related communications on personal devices and apps such as WhatsApp to investment funds and advisers, Reuters has reported. ®

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