U.S. regulators announce a combined $549 million in penalties against Wells Fargo and a raft of smaller or non-U.S. firms that failed to maintain electronic records of employee communications.
Apart from the fines, banks were ordered to “cease and desist” from future violations and hire consultants to review bank policies, the SEC said.
On Wall Street, company records of emails and other communications via official channels are often automatically generated to adhere to requirements that clients are treated fairly. But after some of the industry’s biggest scandals of the past decade hinged on incriminating messagesEncrypted messages sent on third-party platforms like Signal make it impossible for banks to record and retain logs of interactions.
An analysis of 13 Wells Fargo employees, for instance, found that all had violated the bank’s communications policies by using text messages to communicate with coworkers and market participants. They used the side channels to communicate with over 100 other employees, including senior supervisors, over thousands of messages, according to the CFTC“Employees’ use of unapproved communication methods was not hidden within the firm,” the CFTC said.
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Regulators hit Wall Street banks with $549 million in penalties for record-keeping failuresU.S. regulators have imposed a total of $549 million in penalties on Wall Street banks for their failure to maintain electronic records of employee communications. Wells Fargo, although a smaller player, received the highest fines amounting to $200 million.
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