Next wave of U.S. penalties rolls toward the banking world 

Another billion-dollar fine for the banking industry (Image: Lukasz Radziejewski / unsplash)

Banks have already paid several billion in fines in the U.S. Now another billion dollars is added – Swiss institutions are also affected. 

The abuses in banks are so large that regulators around the globe have already imposed billions in fines. The only thing certain is that Swiss banks are practically always involved in the fines. 

Now it is going into a new round. The regularly well-informed WSJ reported on Saturday, citing informed circles, that big banks are facing more than a billion dollars in fines. This time it is about the use of prohibited apps. In particular, the focus is on communication via WhatsApp. 

UBS with 200 million 

The U.S. supervisory authorities criticized that the agreements on chats did not comply with the regulatory requirements for the retention of business correspondence, it was further said. Among those affected are Bank of America, Barclays, Citigroup, Goldman Sachs, Deutsche Bank and also the major Swiss bank UBS. A fine of $200 million awaits each of these institutions. UBS did not respond to the U.S. financial journal’s request for comment. 

Already in the run-up there were, again and again, reports that credit institutions would agree with the Americans behind closed doors about the settlement of the accusations to the communication over WhatsApp. Especially European credit institutions, such as Barclays, but also the major Swiss banks, UBS and Credit Suisse, were involved, “Bloomberg” had already reported at the end of July. 

Double breach of the rules 

According to the rules of the U.S. Securities and Exchange Commission and the regulator for financial derivatives CFTC, brokers must keep and monitor the written communications of their staff. This is so, for example, that collusion or tips for regulators can be tracked.

However, apps such as WhatsApp, on the other hand, focus on privacy, and a mode can be set to automatically delete messages after a few days or when the chat has been read. 

SEC officials have repeatedly stated that the practice of communicating through private apps is illegal and also makes it more difficult for investigations to follow up. 

Home office a problem 

Bank employees are largely prohibited from using such programs, to be sure. However, during the coronavirus pandemic, it had become increasingly difficult for financial institutions to police the rules as stringently, because virtually all of their workforces worked from home. 

In addition, in the age of cyber-attacks banks would offer a larger attack surface if communication was conducted via many channels – i.e. additionally via apps, the paper continued. 

No end in sight 

The issue has not ended – the big banks are being ordered to pay fines. Now the SEC & Co. are taking the smaller banks to task for communicating via unauthorized apps, the American financial newspaper concluded.


Next wave of U.S. penalties rolls toward the banking world 

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