Morgan Stanley has slapped its own bankers with fines of more than $1 million as it looks to crack down on the misuse of WhatsApp and other apps to conduct official business, according to a report Thursday.
The penalties were enacted after Morgan Stanley agreed to pay $200 million last summer to federal regulators over the rampant use of WhatsApp to conduct official business within the banking industry.
Bankers found to have made improper use of WhatsApp could be dinged for anywhere from “a few thousand dollars to more than $1 million” per person, depending on the extent of the violation, the Financial Times reported, citing sources with knowledge of the matter.
The size of each fine is purportedly determined by a grading system based on factors such as whether the WhatsApp messages were a first offense, how many messages were sent and the total number of messages, according to the outlet.
The fines will either be taken from the offending employee’s future pay or clawed back from past bonuses they have received.
Additionally, Morgan Stanley has begun training its employees on scenarios in which they should shift conversations from their personal devices to official work channels.
Morgan Stanley declined to comment.
The SEC launched a probe into the digital communications practices at major banks in 2021. The agency sought information on whether banks had been properly tracking employees’ conversations regarding official business.
In September, the SEC fined 16 financial firms, including major global banks, a combined $1.8 billion after staff discussed deals and trades on their personal devices and apps. The probe has since expanded beyond broker-dealers to investment funds and advisers, according to four people familiar with the inquiry, Reuters reported in October.
Regulators require brokers to keep clear records of their work-related communications.
Last August, Morgan Stanley revealed that it would pay a $125 million fine to the SEC and a $75 million fine to the Commodity Futures Trading Commission to settle their respective probes into the use of WhatsApp.
Other financial institutions, including Goldman Sachs and UBS, have paid similar penalties.
In late 2020, Morgan Stanley also fired a pair of its commodities trading executives who had reportedly violated company rules on the use of outside communications tools.
