(Reuters) — The U.S. Securities and Exchange Commission’s review of Wall Street’s handling of work-related communications on personal devices and apps such as WhatsApp has expanded beyond broker-dealers to investment funds and advisers, according to four people familiar with the investigation.
Late last month, the SEC and the Commodity Futures Trading Commission fined 16 financial firms, including major banks such as Goldman Sachs Group Inc. and Morgan Stanley, a combined $1.8 billion after staff discussed trades and deals on their personal devices and apps, in a comprehensive examination of record keeping methods.
This probe was aimed mainly at brokers and dealers rather than asset managers, although funds became more cautious as a result and joined banks in tightening controls on personal mobile phones, as well as text messages and apps such as WhatsApp.
The SEC̵
7;s regulatory unit has sent requests to a number of funds and advisers asking for information about their protocols for so-called “off-channel” business communications, including as recently as last week, the four sources told Reuters. The agency has asked companies to preserve and produce documents and share information about policies related to the use of devices and platforms, said the sources, who spoke on condition of anonymity.The regulator has also asked for details of the companies’ organizational charts and past violations and cleanup efforts, two of the sources said.
The SEC has been aggressive in enforcement under Democratic leadership, and the industry investigation into the banks was a landmark one for the SEC and the Commodity Futures Trading Commission, marking one of their largest collective resolutions.
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