SEC Examines Wall Street Banks’ Literature On Digital Employee Communication: Report

The United States Securities and Exchange Commission (SEC) has opened an investigation into how companies on Wall Street track their employees’ digital communications, according to a report released Tuesday by Reuters.

Sources familiar with the matter told Reuters that SEC enforcement staff had contacted numerous banks in recent weeks to see if they had correctly recorded work-related conversations, including text messages and emails.

This “sweep” of banks apparently stems from another investigation the SEC had been carrying out for some time into a specific financial institution, according to sources speaking to Reuters, although they did not name the institution.

However, Reuters noted that JPMorgan Chase recently revealed in August that it had received inquiries regarding its “compliance with document retention requirements regarding commercial communications sent through email channels” that it had not received. not approved.

The Hill has contacted the SEC for comment.

As a source told Reuters, there is no clear legal basis in the United States for which an employer can demand to see an employee’s personal communications. As such, many companies prohibit the use of personal email, text, and other forms of communication. New communication applications, however, present a new challenge for this workaround.

When he took office in April, the chairman of the SEC Gary GenslerGary Gensler Protecting consumers also means protecting and inciting whistleblowers. was seen as the ideal president of the new Democratic administration, having helped expand oversight during the Obama administration in the post-2008 financial crisis.

Reuters noted that this recent sweep could be a sign of the SEC’s expanded enforcement and oversight under democratic control.

SEC chief enforcement officer Gurbir Grewal addressed the issue of “record-keeping violations” in a speech last week. He pointed to action by the SEC against a California brokerage firm last year that failed to document text messages related to the timing of transactions and the prices of certain securities.

“We continue to see in multiple investigations cases where one party or company that used off-channel communications preserved and produced them, while the other did not. Not only do these failures delay and hinder communications. investigations, but they increase accountability, integrity and spoliation issues, ”Grewal said.

“Look, a lot of these aren’t even new technological advancements. After all, my 75-year-old mother has been texting my 13-year-old daughter for years, and I’m sure many in this room have sent or received business communications on personal devices or unofficial communication channels, ”he said. “You need to actively think about and actively address the many compliance issues raised by the increased use of personal devices, new communication channels and other technological developments such as ephemeral applications,” he added.

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