Morgan Stanley fines its bankers over messaging breaches

MORGAN Stanley fined some of its own bankers more than US$1 million each for conducting business on WhatsApp and other messaging platforms, the latest fallout from an industrywide probe that saw US regulators impose the record penalties for monitoring lapses.

The funds have either been clawed back from previous bonuses or will be docked from future pay, according to a person familiar with the matter, who asked not to be named as the information has not been made public.

Morgan Stanley is the latest bank to require individual staff to bear some of the burden of an unprecedented regulatory investigation, after it emerged that unapproved messaging platforms were being widely used to conduct business. Finance firms are required to scrupulously monitor communications involving their business to head off improper conduct.

Individual penalties at Morgan Stanley range from a few thousand US dollars to more than US$1 million, based on a points system that considers factors including seniority, number of messages sent and whether they were issued prior warnings, according to the Financial Times, which first reported the news.

The bank now gives employees training on scenarios when they should shift conversations from personal devices to official platforms such as their work email, the FT reported.

Last year, Morgan Stanley agreed to pay US$200 million in fines to the Securities and Exchange Commission and the Commodity Futures Trading Commission. A dozen banks, including Barclays, Goldman Sachs Group and UBS Group AG have paid similar levies with total penalties in the matter cresting US$2 billion.

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The probe has also prompted some wider changes. Deutsche Bank AG’s management board agreed to take a 75,000-euro (US$81,200) cut to their 2021 bonuses and the German lender introduced a new app that allows the retrieval of messages on company phones.

JPMorgan Chase . cut the 2021 pay package for asset- and wealth-management head Mary Erdoes “related to internal, SEC and CFTC investigations into the firm’s compliance with certain record preservation requirements,” the firm disclosed in a 2022 filing. BLOOMBERG