Asset managers, banks alarmed after WhatsApp-related penalties

Wall Street banks constitute the majority of companies involved in communications and record-keeping investigations conducted by the US Securities and Exchange Commission and the Commodity Futures Trading Commission.

Banks have collectively been fined or have set aside more than $1 billion to cover regulatory penalties. This is why asset managers are tending now to tighten controls on personal communication apps such as WhatsApp as they join banks in an attempt to ensure employees do abide by the rules when they do business with clients remotely.

US governmental regulators began to clamp down on the use of unauthorized messaging tools to discuss potentially market-moving matters, but the issue gathered urgency when the COVID-19 pandemic forced more finance staff to work from home in 2020.

But fund firms with billions of dollars in assets are also increasing their scrutiny of how staff and clients interact.