Morgan Stanley has imposed millions of dollars in fines on its bankers for conducting business via WhatsApp, violating regulatory restrictions on the use of this popular messaging app.
Individual penalties at Morgan Stanley range from several thousand dollars to over $1 million. These fines are determined by a points system that considers various factors, including the employee’s seniority, the number of messages sent, and whether any prior warnings were issued, according to the Financial Times, which first reported the story.
The fines have been deducted from previous bonuses or will be withheld from future compensation, as stated by a source familiar with the situation. Last year, Morgan Stanley also agreed to pay $200 million in fines to the Securities and Exchange Commission and the Commodity Futures Trading Commission.
This regulatory scrutiny has not been limited to Morgan Stanley; other major banks, including Bank of America, Barclays, Citigroup, Deutsche Bank, Goldman Sachs, and UBS, have also faced investigation. The rapid increase in the use of personal messaging services by traders and brokers during the pandemic was a significant factor in the enforcement actions, which resulted in total penalties exceeding $2 billion across the industry.
In response to these issues, Morgan Stanley is now providing employees with training on when to transition conversations from personal devices to official communication platforms, such as work email, according to the FT.