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What’s up? FIVE banks to pay $1 billion in fines for illegal chats

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It’s thirteen years since I had the idea of using social media for insider trading.

TBH, any media can be used to buck the system. These days we talk about Telegram and Signal, but a few years ago it was Blackberry Messenger and Facebook. Whenever technology develops anonymity, crime will follow. We might look for the criminals by law, but what about the criminals by work? If a trader tells a friend to invest or short $1 million in Tesla, is that right or wrong? If the trader knows that their friend will make $20 million or more by doing this in the next 24 hours, is that right or wrong?

This is the key issue: if you have a sure-fire bet, then it’s not a bet. It’s a rigged marketplace that steals from Peter to pay Paul.

That’s why regulatory authorities are always trying to be eagle-eyed to clamp down on such activity. I remember a major case in the UK where City bankers were using their partners to invest via SMS text messages and emails. An example is a case that dates back to 2008 where a print manager at UBS shared sensitive documents with friends and family.

There are many others, as exampled by Geraint Anderson, Cityboy, who spoke at the Financial Services Club ten years ago. So, why do I raise this issue today?

Well, I guess it builds on the idea of anonymous digital transfers via monero with privacy. City regulators are now trying to attack the traders who trade illegally by sharing data anonymously via whatsapp and other encrypted media.

Regulators are poised to extract about $1 billion in fines from the five biggest US investment banks for failing to monitor employees using unauthorized messaging apps.

Why has this come to the fore today?

Finance firms are required to scrupulously monitor communications involving their business to head off improper conduct. That system, already challenged by the proliferation of mobile-messaging apps, was strained further as firms sent workers home shortly after the start of the Covid-19 outbreak.

In December, the Securities and Exchange Commission and the Commodity Futures Trading Commission imposed $200 million in fines on JPMorgan, saying that even managing directors and other senior supervisors at the bank had skirted regulatory scrutiny by using services such as WhatsApp or personal email addresses for work-related communication.


People in banks have realised they talk secretly via apps without scrutiny?

Just to be clear: this became a thing during the pandemic.

Traders and brokers aren’t supposed to use such products to conduct the firm’s business. The practice became more common—and harder to detect—during the early stages of the pandemic, when employees switched to working entirely from home.

That is such a shocker!!!!


[I am being sarcastic]

Chris Skinner Author Avatar

Chris M Skinner

Chris Skinner is best known as an independent commentator on the financial markets through his blog,, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal's Financial News. To learn more click here...

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