Financial Institutions Fined $549 Million over Record-Keeping Violations Concerning Electronic Communications on Employees’ Personal Devices

On August 8, 2023, the SEC and the CFTC (the Agencies) issued fines totaling $549 million against several financial institutions and their affiliates in their capacities as broker-dealers, swap dealers, and futures commission merchants, over their failure to maintain and preserve electronic communications on their employees’ personal devices. 

The Agencies found, and the firms admitted, that the firms’ employees communicated about business matters on their personal devices, including by text message and other various messaging platforms, such as iMessage and WhatsApp.  The firms failed to maintain and preserve these messages, in violation of federal securities laws and Agency recordkeeping and supervision provisions. 

The Agencies’ actions are a continuation of similar efforts concerning the enforcement of document retention supervision of employees’ personal devices.  The SEC previously fined 16 other securities firms approximately $1.1 billion for similar conduct.  And similarly, the CFTC has fined 18 financial institutions approximately $1.091 billion since December 2021.