27, 2022 Release Number 8599-22 CFTC Orders 11 Financial Institutions to Pay Over $710 Million for Recordkeeping and Supervision Failures for Widespread Use of Unapproved Communication Method, CFTC Press Release, Sept. Indeed, the mere use of ephemeral messaging could arguably create an appearance of impropriety. Because ephemeral messaging apps automate the destruction of messages, many perceive rightly or wrongly that users employ the technology to hide evidence of wrongdoing. ( See SEC Charges 16 Wall Street Firms with Widespread Recordkeeping Failures, SEC Press Release, Sept. Ephemeral messaging applications, many of which effectively function as disappearing messaging apps, are rapidly disrupting the traditional electronic communications regime, raising numerous recordkeeping, e-discovery, and information security considerations along the way. ephemeral messaging is used for nefarious purposes. The settlements involved 15 broker-dealers and one affiliated investment adviser for, according to the SEC, “widespread and longstanding failures by the firms and their employees to maintain and preserve electronic communications,” in violation of recordkeeping requirements in the federal securities laws. See JPMorgan Admits to Widespread Recordkeeping Failures and Agrees to Pay $125 Million Penalty to Resolve SEC Charges, SEC Press Release, Dec. (There was also a prior December 2021 settlement between the regulators and a broker-dealer subsidiary of JPMorgan Chase that involved a $200 million fine for alleged failures to retain and track work-related communications on personal cellphones between January 2018 and November 2020. 27, 2022, the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) announced settlements totaling approximately $1.8 billion in fines and penalties against 16 Wall Street financial institutions. Because ephemeral messaging is quickly becoming an integral part of how employees in corporate America communicate, companies can expect regulators to inquire about ephemeral messaging, the compliance policies underlying its use, and the policies underlying its preservation and collection during an investigation.
0 Comments
Leave a Reply. |