More leading names disclose messaging app discussions with US regulators

Several US financial services firms disclose their ongoing discussions with US regulators over employees’ use of messaging apps.

Wells Fargo and Société Générale (SocGen) disclosed in their recent quarterly earnings reports that they are in talks with two US regulators to settle investigations into their employees’ use of messaging applications that might have broken recordkeeping rules.

Wells Fargo said the “Securities and Exchange Commission and the United States Commodity Futures Trading Commission have undertaken investigations regarding the Company’s compliance with records retention requirements relating to business communications sent over unapproved electronic messaging channels. The Company is in resolution discussions with these agencies, although there can be no assurance as to the outcome of these discussions.”

And SocGen said it and its investment banking unit, SG Americas Securities, LLC (SGAS) had received requests for information from the SEC (in December 2022) and the CFTC (in March 2023).

Broker-dealers, investment advisers and swap dealers

“These inquiries follow a number of regulatory settlements in 2022 with other firms covering similar matters. SGAS has reached a settlement with the SEC, and Societe Generale and SGAS have reached a settlement with the CFTC. As of the date of this update, both settlements were pending formal regulatory approval,” SocGen said in its filing.

Charlotte, NC-based regional bank Truist Financial said last Monday that it has received requests for information from the SEC and CFTC relating to electronic messaging recordkeeping requirements. In its latest quarterly report, the bank said its subsidiaries involved in broker-dealer, investment adviser and swap dealer activities have received such requests and the bank is cooperating with them.

Recordkeeping lapses

These companies’ disclosures come roughly 11 months after the SEC and CFTC fined 11 Wall Street banks and brokerages more than $1.8 billion collectively for conducting some company business on messaging platforms such as WhatsApp and failing to keep proper records and supervise such communications.

Last month, BNP Paribas said it had had reached proposed resolutions with the SEC and CFTC to resolve similar probes, and in May, the SEC charged HSBC Securities USA Inc and Scotia Capital USA Inc for these lapses, with the CFTC charging the Bank of Nova Scotia and Scotia Capital as CFTC registrants.