Morgan Stanley has fined its own staff members for breaching messaging rules, reports the Financial Times.
The story is the latest development in a wider WhatsApp scandal that saw several large banks receiving combined fines of more than US$1bn in 2022, including a US$200m penalty for Morgan Stanley.
According to the report, individual employees at Morgan Stanley received fines ranging from a few thousand dollars up to US$1m. The amounts were calculated using a points-based system which took into account the number of messages sent, the employee’s seniority, and whether they had been warned previously about using the messaging app.
Funds will reportedly either be deducted from bonuses already received, or docked from future pay cheques.
The issue with bankers using WhatsApp messages to discuss work-related matters is that banks are required to adhere to strict record-keeping regulations in relation to written communication, including email and other types of messaging.
When Covid hit, it forced millions of people to work from home at very short notice and as a result, blurred the lines between personal and professional use of mobile devices. “Having an entire workforce switch to remote access at such short notice meant many people were using their own phones and laptops to contact other employees and clients” says Mike Finlay, CEO of RiskBusiness. “This wreaked havoc with banks’ ability to monitor conversations. As predicted, we are starting to see the repercussions of that now. The full extent of the problem is just emerging.”
JPMorgan was the first of several banks to be hit with a fine in relation to WhatsApp usage by the US Securities and Exchange Commission (SEC) in 2021. The bank admitted that from at least January 2018 through November 2020, its employees often communicated about securities business matters on their personal devices, using text messages, WhatsApp, and personal email accounts. None of these records were preserved by the firm, as required by federal securities laws. Other banks fined by the SEC included Citigroup, Goldman Sachs and Bank of America.
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