Wall Street Firms Faced Billions in Penalties after Recordkeeping Fiasco

Record keeping has been an integral part of running a business in any industry for decades. This allows entrepreneurs and stakeholders to efficiently monitor their progress and help them make informed decisions regarding policies in the workplace. Furthermore, having a record of all transactions and business communications will enable companies to comply with regulations for recordkeeping. 

To ensure compliance with the law and have peace of mind, many enterprises invest in solutions that provide a secure network for archived text messages. However, most organizations still fail to keep records of important transactions and internal communications. Negligence in recordkeeping can significantly compromise classified data and will lead to legal consequences in the long run. 

In September 2021, some of the biggest financial firms on Wall Street, New York City, faced legal repercussions due to their recordkeeping policies. The Securities and Exchange Commission (SEC) imposed more than $1 billion in combined fines to up to 16 enterprises for failure to archived business transactions, especially those done through applications on personal devices, including WhatsApp. 

The banks, which include Barclay, Citigroup, Bank of America, and Goldman Sachs, are alleged to have been deficient in several areas of record keeping, including preserving electronic communications and capturing information in a database. Their actions are likely to have hindered various government institutions from investigating possible fraud, money laundering, and other financial crimes.

One area of concern is using personal mobile messaging apps on the trading floor, which is often not monitored in real time. This creates a higher risk for hackers accessing confidential information. It is a good idea to prohibit employees from sending texts and other messages on their phones while at work.

Although some firms have already begun to improve their compliance programs, the SEC’s action reminds them of the importance of proper record-keeping. Many of the penalties issued against the big four banks, including Citigroup, JPMorgan, Chase, and Morgan Stanley, represent a substantial escalation of a relatively minor problem in the past.

If you are looking for the top archiving solution to ensure text messaging compliance in your workplace, you should check out LeapXpert. With more than four decades of combined experience in the industry, our goal is to provide our clients with a reliable platform for all the electronic records of various business interactions. Contact us now by clicking here to get started.