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The SEC launches investigation into Wall Street banks' personnel communications



(Reuters) – The US Securities and Exchange Commission has launched a broad investigation into how Wall Street banks keep track of employees' digital communications, said three people familiar with the matter.

SEC security staff contacted several banks in recent weeks to verify that they had satisfactorily documented employees' work-related communications, such as text messages and e-mails, focusing on their personal devices, said the people who spoke anonymously. .

The "Sweep" industry is another sign that the SEC is increasing compliance under its democratic leadership, highlighting the challenges facing Wall Street banks facing staff communications during the pandemic work from home.

The SEC conducts regular sweeps. to quickly gather information on issues that it is suspected may be widespread. Sweeps can sometimes, but not necessarily, lead to formal probes.

The sweep seems to stem from an investigation that the agency has conducted for some time in an individual financial institution, said two of the sources without naming the company. [1

9659002] In August, JPMorgan Chase & Co. revealed that it had made inquiries concerning its "compliance with requirements for the preservation of registers in connection with business communications sent via electronic message channels" which the bank had not approved. It said it was discussing a "resolution" with regulators, without specifying which ones.

Speakers for the SEC and JPMorgan declined to comment.

The SEC and the Financial Industry Regulatory Authority, the Wall Street self-regulatory body, require broker-dealers to keep records of all business-related communications. Banks must take a fine line to meet these requirements without violating the privacy of employees, says one of the sources.

In the United States, there is no clear legal basis that an employer can require to inspect employees & # 39; personal communications, while in other countries it may violate data protection regulations, the source said.

As a result, many financial companies prohibit the use of personal e-mail, texts and other social media channels for work purposes, but to abstain. with the proliferation of communication apps – especially during the pandemic – is a challenge for companies.

In a speech last week, SEC Chief Executive Gurbir Grewal warned that institutions should keep an eye on the many "issues raised by the increasing use of personal devices, new communication channels and other technological developments."

Failure to maintain and Producing communications records could hinder legislative investigations, Grewal said in remarks.

Last year, Morgan Stanley fired two top executives for unauthorized use of WhatsApp to discuss work issues. Catalog

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