U.S. regulators are poised to announce a settlement with firms across Wall Street for failing to monitor employees using unauthorized messaging apps.
The Securities and Exchange Commission and the Commodity Futures Trading Commission are preparing to disclose the results of the investigation as soon as Wednesday that could see them extracting total fines of around $2 billion, according to a person with knowledge of the matter as well a review of disclosures made by the world’s largest banks.
A representative for the SEC declined to comment and a representative for the CFTC didn’t immediately respond to requests for comment.
The action represents a rare escalation from regulators looking into such an issue, with fines tending to be significantly lower in the past. The sweeping civil probes rank among the largest-ever penalties levied against U.S. banks for record-keeping lapses, dwarfing a $15 million penalty imposed on Morgan Stanley in 2006 over its failure to preserve emails.
Morgan Stanley said in July it was nearing a settlement that would see it pay a $200 million fine — a figure that was likely to be mirrored by its biggest rivals. Other major banks also disclosed setting aside similar figures at the end of their second-quarter earnings without specifying the reason. JPMorgan Chase & Co. has been the only bank until now to reach a settlement with the regulators, and was the first to report the fines in December.
Finance firms are required to scrupulously monitor communications involving their business to head off improper conduct. That system, already challenged by the proliferation of mobile-messaging apps, was strained further as firms sent workers home shortly after the start of the Covid-19 outbreak.
Chicago-based Curi Capital gets new majority owner as $14 billion RIA eyes acquisitions and expanded family office services
Partnership pairs organic lead detection with paid ad targeting to help end "spray-and-pray" marketing for growth-seeking advisory firms.
Jonathan Lewis joins the wealth management giant as it proceeds with a $2 billion AI and technology push for advisors.
A third-generation Pennsylvania firm with 24 advisors and $1.6 billion in client assets has left Cambridge Investment Research.
Fast-growing $7.6 billion Pittsburgh-based RIA secures growth capital but retains full management control.
Northern Trust’s Ken Lassner shows advisors how to convert volatility into after-tax portfolio gains
Dan Biagini of American Equity says the steady decline of pensions, longer lifespans and a reset in interest rates are rewriting how advisors build retirement income
