Why JPMorgan Was Fined $200mn For Using Whatsapp

A million dollar fine for using WhatsApp. No matter how bizarre this sounds, that's what has happened recently with one of the leading companies in the global financial services industry, JP Morgan Chase.

The global leader in financial services, which offers solutions to the world's most important corporations, governments and other institutions, has itself landed into trouble, resulting in the imposition of not one but two fines, totalling a whopping $200 million.

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Reasons behind the heavy fine

The Securities and Exchange Commission (SEC) has imposed the first fine in the form of a $125 million penalty for allowing Wall Street employees to use apps including WhatsApp to get around US federal record-keeping laws. And that's not all, it further received a $75 million fine from the Commodity Futures Trading Commission (CFTC) for using unapproved communications.

In a statement, the CFTC said that since at least July 2015, JPMorgan employees, including those at senior levels, communicated both internally and externally on unapproved channels, including via personal text messages and WhatsApp messages.

Further, the statement continued by stating that none of these written communications was maintained and preserved by JPMorgan, and they were not able to be furnished promptly to a CFTC representative when requested.

Also Read: WhatsApp Web Gets Three New Features: From Sticker Suggestions To Photo Edits

JP Morgan¡¯s reaction

JPMorgan agreed to pay fines after admitting to ¡®widespread¡¯ record keeping failures in recent years. Between the period of 2018 and 2020, its employees used WhatsApp, text messages, and personal email accounts to communicate about sensitive business matters. The company has reportedly acknowledged that these failures in record-keeping were firm-wide, with such practices not being hidden within the firm.

Securities and Exchange Commission (SEC)¡¯s statement

This $200 mn fine is understood to supposedly be the largest SEC fine yet for record keeping violations. Stating his viewpoints on this imposition, SEC¡¯s chair Gary Gensler said that ¡°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¡±.

Further, SEC¡¯s deputy director of enforcement Sanjay Wadhwa said ¡°JPMorgan¡¯s failures hindered several commission investigations and required the staff to take additional steps that should not have been necessary. This settlement reflects the seriousness of these violations. Firms must share the mission of investor protection rather than inhibit it.¡±

Also Read: Australia: Woman Has Fine Dropped After Cops Mistake Her Ice Cream For Phone While Driving

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