Banking giant Morgan Stanley has reportedly fined employees upwards of $1,000,000 for conducting official business over unauthorized messaging platforms, sources familiar with the matter say.
According to sources, penalties varied according to a number of factors, including previous violations, number of messages sent and seniority, and ranged from several thousand dollars to $1 million, the Financial Times reported.
Regulatory authorities have previously cracked down on financial institutions for violating regulations that require all broker-dealers to keep a record of all business-related communications, Reuters reported. In 2021, Morgan Stanley was required to pay out $200 million to the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission because of unauthorized messaging by employees, the outlet noted.
Morgan Stanley hit bankers with up to $1 mln in penalties for messaging breaches – FT https://t.co/Bh82mTopgM pic.twitter.com/0JdiSjMzkb
— Reuters Business (@ReutersBiz) January 26, 2023
In September, the SEC fined a total of 16 financial firms a combined $1.8 billion after finding that employees used unauthorized messaging services, including WhatsApp, to discuss official matters, according to another report by Reuters. The problem reportedly became more apparent during COVID lockdowns when people began working from home, the outlet stated. (RELATED: Wall Street Made Out Like Bandits During COVID, But Now The Party’s Over)
Morgan Stanley offers its employees compliance training sessions to help them understand when to shift a conversation from their personal devices to official ones, the Financial Times reported. In the training, employees are reportedly warned that seemingly innocent and trivial conversations can often lead to business matters, which is why many banks are requiring employees to take pictures of work-related discussions on personal devices and forward them to compliance departments in order to avoid penalties from regulatory bodies, the outlet reported.
Morgan Stanley did not immediately respond to the Daily Caller’s request for comment.