JPMorgan Chase will pay $200 million in fines to two U.S. banking regulators to settle charges that its Wall Street division allowed employees to use WhatsApp and other platforms to circumvent Federal record-keeping laws. On Friday, the Securities and Exchange Commission said JPMorgan Securities have agreed to pay $125 million after admitting to “widespread” record-keeping failures in recent years. The commodity Futures Trading Commission also said Friday that it had fined the bank $75million for allowing unapproved communications since at least 2015. While speaking to reporters on Thursday evening, an official of SEC said JPMorgan’s failure to preserve those offline conversations violated federal securities law and left the regulator blind to exchanges between the bank and its client.
The move is the latest sign of an ongoing battle between regulators, banks and employees over the use of personal devices. Federal law requires financial firms to keep meticulous records of electronic messages between brokers and clients so regulators can make sure those firms aren’t skirting anti-fraud or antitrust laws. Policing unofficial channels became even more pressing when most of Wall Street went remote during the coronavirus pandemic. Regulators in New York and London have recently ratcheted up enforcement of record-keeping rules as traders migrated to encrypted messaging platforms including WhatsApp, Signal or Telegram.