16 Wall Street institutions pay 1.1 billion USD including UBS and CS

New York (awp/afp) – Sixteen Wall Street institutions, including UBS and Credit Suisse, have agreed to pay $1.1 billion in penalties to the US financial market watchdog, the SEC, for failing to properly store the messages exchanged by their employees from their own mobile devices. The two big Swiss banks each pay a penalty of 125 million dollars.

Citigroup, Goldman Sachs, Deutsche Bank and others “have not maintained or preserved the vast majority of these communications made outside of official channels, in violation of securities laws,” the SEC said in a statement.

The largest American bank by assets, JPMorgan Chase, had already agreed at the end of 2021, for similar reasons, to pay a penalty of 125 million dollars to the SEC and another of 75 million to the CFTC, the agency in charge of the regulation of futures markets.

The SEC then indicated that following its discoveries at JPMorgan, it had launched investigations into the record keeping practices of other financial institutions, without specifying which ones.

A total of 16 establishments are therefore concerned on Tuesday.

Barclays Capital, Bank of America, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, Morgan Stanley and UBS have agreed to pay $125 million each.

Jefferies and Nomura will pay 50 million respectively while Cantor Fitzgerald will pay 10 million.

The SEC criticizes these establishments for having let their employees communicate frequently on matters relating to their work on their personal devices, without having put in place systems to store their messages.

The companies have acknowledged the facts. Several of them had already indicated that they had set aside money to pay these penalties.

They have also begun revising their compliance policies and procedures, the SEC says.

“In finance, everything is ultimately about trust. By failing to meet their record-keeping and record-keeping obligations, the market participants we charge today have failed to maintain that trust,” commented SEC Chairman Gary Gensler, quoted in the statement.

These rules, in force since the 1930s, are “vital to preserve the integrity of the markets”, he recalled.

“As technology evolves, it is even more important that certified institutions communicate about their business only through official channels, and they must maintain and preserve these communications,” he added.


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