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Regulators announced more than $500 million in fines for Wall Street banks due to unauthorized WhatsApp and email communications between employees. Typically, banks and trading firms have strict guidelines that mandate employees to use company-provided emails and phones in order to monitor conversations.
However, employees at Wells Fargo & Co (NYSE:WFC) and BNP Paribas (OTC:BNPQY) were found to be using unofficial means of communication like WhatsApp and personal emails. As a result, the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission levied a combined fine of $549 million on the banks. Of this, Wells Fargo is responsible for $125 million, while BNP Paribas will pay $110 million.
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This brings the cumulative total amount of fines doled out due to unregulated communication on Wall Street to more than $2 billion, according to Bloomberg. Regulators have been trying to crack down on unofficial communication between bankers in order to limit insider trading as well as other offenses.
"Compliance with the books and records requirements of the federal securities laws is essential to investor protection and well-functioning markets," the director of the SEC's division of enforcement, Gurbir S. Grewal, said in a release.
Other smaller firms got hit with fines like Mizuho Financial Group Inc (NYSE:MFG), BMO Capital Markets (NYSE:BMO), Wedbush and more.
Price Action: Wells Fargo’s stock traded lower Tuesday, down about 1.29% to $44.48. Most bank stocks were down on the day following Moody’s downgrade of a number of U.S. bank stocks.
Photo: Shutterstock
