Financial giant Morgan Stanley has been fined $200 million for "use of unapproved personal devices" and 'inadequate' record keeping, both of which were revealed in the bank's quarterly earnings.
The fine has been issued by US regulators which said that managing directors and senior supervisors had evaded regulatory scrutiny by using WhatsApp or personal email addresses for business communications, according to The Stack.
"As technology changes, it's even more important that registrants ensure that their communications are appropriately recorded and are not conducted outside of official channels in order to avoid market oversight," said SEC chair Gary Gensler.
A similar fine was also issued to JP Morgan which was also found to have used services like WhatsApp for business communications. One of the biggest concerns here is that these messages can be easily deleted which makes it difficult to keep accurate records and ultimately hampers accountability.
This was a key point recently made by the UK's Information Commissioner's Office (ICO) with regard to its investigation of the Department of Health a Social Care. The department received a reprimand under UK data protection law from the ICO due to its use of personal email and WhatsApp during the pandemic. The regulators report also suggested this was more practice used widely throughout the government, however, there have been no legal fines issued as yet.
Transparency campaigners have launched legal action against ministers via the UK's third-highest court. Again, the main point of concern is the fact messages can be deleted - campaigners suggest this is "unlawful" and "undemocratic".
"Vast sums of public money pass hands following deals cooked up, in whole or in part, through these untraceable channels," the Good Law Project, which brought the case, said. "They make it difficult or impossible for civil servants to act as proper stewards of public money. They pose a profound risk to national security - only last week it was revealed that private channels used in Number 10 had been hacked. And their use guts the clear public interest... in good record-keeping."
