This week, Jim Gill of Hanzo shows us the money — $1.8 billion in fines to financial firms and institutions for using unauthorized messaging apps! Ouch!

In the article (Compliance Update: Unauthorized Messaging Apps Lead to 1.8B in Fines, available here), Jim covers a recent press release from the Securities Exchange Commission (SEC), sixteen Wall Street firms were fined for widespread and longstanding failures by the organizations and their employees to maintain and preserve electronic communications.

What did they do? Between 2018 to 2021, the firms’ employees routinely communicated about business matters using text messaging applications on their personal devices. The firms did not maintain or preserve the majority of these off-channel communications, violating federal securities laws.

Additionally, the Commodity Futures Trading Commission (CFTC) found that traders were regularly using encrypted messaging apps like WhatsApp or ephemeral messaging apps like Signal, and then deleted communications “to avoid creating records and evade regulatory and bank oversight.”

Both agencies simultaneously brought cases against the firms, to send “a strong message to all that we regulate that we will not tolerate efforts to evade our regulatory oversight.” To drive that point home, $1.8 billion in fines were levied against companies out of compliance with the preservation of communications channels. All that over the use of unauthorized messaging apps!

So, what are the compliance takeaways from the fines? You’ll have to read his blog post here to find out! It’s just one more click! I’m guessing these financial companies got the “Signal” and they know “WhatsApp” now! See what I did there? 😉

So, what do you think? Could there be use of unauthorized messaging apps in your organization? Please share any comments you might have or if you’d like to know more about a particular topic.

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