Barclays latest global bank ensnared in U.S. ‘Whatsapp’ probes

0

FILE PHOTO: A Barclays bank building is seen at Canary Wharf in London, Britain May 17, 2017. REUTERS/Stefan Wermuth/File Photo

LONDON/FRANKFURT  – Barclays joined a host of European banks feeling the pinch of a U.S. regulatory probe into breaches related to the use of messaging apps such as Whatsapp, setting aside $200 million to cover the costs in half-year results on Thursday.

U.S. regulators have been cracking down on the use of personal communications platforms by bank staff to discuss potentially market-moving matters with clients, with the issue gaining urgency since the COVID-19 pandemic led to more bankers working from home.

Regulators require finance companies to keep a record of vast swathes of staff communications to deter and uncover infringements such as insider trading.

Barclays, Credit Suisse, Deutsche Bank and asset manager DWS have all laid out potential charges arising from the probe this week, while UBS has said it is being investigated.

They follow Wall Street giants Bank of America, Morgan Stanley and Citigroup, which have also all set aside cash to cover expected fines. JPMorgan Securities was fined $200 million for “widespread” failures in December.

While U.S. regulators have led the way in scrutinizing bankers’ use of unauthorized communications channels, others have signaled they intend to keep an eye on bankers working remotely. Britain’s Financial Conduct Authority reminded firms in guidance on home working published in October that it could visit finance staff at home if required.

Remote working poses “significant challenges” for bank compliance departments, James Alleyne, legal counsel at Kingsley Napley told Reuters. “We would certainly expect to see much more activity [from regulators] in this area,” he added.

British bank Barclays said it had reached an agreement in principle with the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) this month to resolve the matter, with the final penalties expected to be $200 million between them and paid in the third quarter.

Switzerland’s Credit Suisse on Wednesday booked a provision of $200 million for the matter, while cross-town rival UBS Group said US regulators were looking into whether it properly documented communications among staff.

In Germany, Deutsche Bank on Wednesday announced 165 million euros in additional provisions for “regulatory enforcement”. It said some of that was for the U.S. SEC and CFTC messaging investigations. The bank declined to say exactly how much.

DWS, the German asset manager mostly owned by Deutsche, disclosed on Wednesday that it made a provision of 12 million euros ($12.23 million).

Deutsche Bank earlier this year said that it was investigating the messaging and email use of Asoka Woehrmann, the DWS CEO at the time.

Woehrmann, who in January told analysts “I emphatically reject all these allegations”, stepped down in June after raids by prosecutors over the allegations that the fund misled investors over its green credentials.

Last year, Reuters reported that the SEC was looking into whether Wall Street banks have been adequately documenting employees’ work-related communications, such as text messages and emails.

($1 = 0.9599 Swiss francs)

($1 = 0.9815 euros)

Subscribe to our business newsletter

Read Next

Don’t miss out on the latest news and information.

Subscribe to INQUIRER PLUS to get access to The Philippine Daily Inquirer & other 70+ titles, share up to 5 gadgets, listen to the news, download as early as 4am & share articles on social media. Call 896 6000.

For feedback, complaints, or inquiries, contact us.

FOLLOW us ON GOOGLE NEWS

 

Read original article here

Denial of responsibility! My droll is an automatic aggregator of the all world’s media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials, please contact us by email – [email protected]. The content will be deleted within 24 hours.

Leave a comment