On September 27, local time, the U.S. Securities and Exchange Commission announced that it had imposed fines on 16 Wall Street financial institutions because these financial institutions and their employees had "a widespread long-term failure in keeping communication records."

Reporter | Feng Saiqi

Editor |

On September 27, local time, The U.S. Securities and Exchange Commission (SEC) announced that it would impose fines on 16 Wall Street financial institutions because these financial institutions and their employees "are generally prolonged failures in keeping communication records." The

SEC file shows that the fine is divided into three levels: US$125 million, US$50 million and US$10 million. Among them, eight financial institutions including Barclays Capital, Bank of America , Citigroup , Credit Suisse Securities, Deutsche Bank , Goldman Sachs , Morgan Stanley , UBS Securities , all need to pay a fine of 125 million yuan. Five affiliated companies of the above-mentioned institutions were also named.

In addition, Nomura Securities and Jeffrey Group will have to pay a fine of US$50 million respectively; Canto Fitzgerald will have to pay a fine of US$10 million.

After investigation, from January 2018 to September 2021, employees of the above-mentioned financial institutions used electronic devices to discuss their work. Most of the communication channels did not report to the regulatory authorities, and the communication records were not kept intact. "Through unofficial channels, employees including senior investment bankers, exchanged tens of thousands of information with colleagues and external parties. The above-mentioned behavior violated the U.S. Federal Securities Law." Gurbir Grewal, head of law enforcement at

SEC, said: "Whether in terms of the number of companies involved or the amount of fines, this fine highlights the importance of record keeping requirements."

, 16 financial institutions acknowledged the SEC's allegations, saying that their behavior did violate the record keeping provisions of the U.S. Federal Securities Law, agreed to pay more than $1.1 billion in consolidated fines, and have begun to improve compliance strategies.

At the same time, US Commodity Futures Trading Commission (CFTCh) also made similar charges against the above financial institutions, imposing a total fine of more than US$710 million. The CFTC said the violations were "known within the bank, but no one stopped it" and some companies ignored regulatory compliance policies and seriously threatened regulatory authorities' risk prevention and control requirements. At present, CFTC has reached settlements with most companies.

In October 2021, the SEC said it was investigating Wall Street financial institutions' monitoring of employee communication records to ensure financial security and stability of the financial market.

To meet compliance requirements, many financial companies prohibit employees from using personal email, text messages and other social media channels to handle work. However, during the COVID-19 pandemic, the requirements of remote working have greatly increased the frequency of employees using social media to communicate, and the update of communication software has put forward higher requirements for the monitoring system.

In December 2021, regulators imposed a $200 million fine on JPMorgan for indulging executives and employees to use instant messaging software and private emails to discuss their work. Among them, the SEC issued a fine of US$125 million and the CFTC issued a fine of US$75 million.