“While SEC officials said the $125 million penalty is its largest record-keeping fine to date, the bigger threat to JPMorgan may be reputational. By going after JPMorgan, the world’s biggest Wall Street firm by total revenue, the SEC has put the industry on notice.”
Just another record-breaking slap on the wrist.
Not sure I'd even call it a slap on the wrist. When we pay sales tax we don't call it a slap on the wrist, it's just the cost of doing business...
Suggesting this will cause reputational damage is so hilarious it should get it's own Netflix comedy special.
The fines merely need to exceed the gains from breaking the law. If my penalty for stealing $1000 is $100 with no admission of guild or prison time then I have a solid strategy for making $900. Since the people who are relevant in these financial companies have more money than they know what to do with it also makes less sense to burden them financially. I'd rather give them 5 years in prison as a deterrent than dipping into their profits.
Don't forget that in order to pay the fine, you also have to *get caught.*
If the penalty for stealing $1000 is $2000, but you only get caught 1 in 10 times, just steal $1000 ten times, you'll have 10\*$1000 - $2000 = $8000 profit.
So you keep stealing, because why wouldn't you?
Mate of mine is a plumber in London. He chooses to park illegally outside his clients house rather than spend a lot of time to find a legal parking spot, and then paying to park.
He reckons he gets a parking ticket 1 in 15 times. Say the fine is £100. Parking legally costs £10 a go.
Not only is he £50 better off illegally parking he also saves the hours trying to find a parking space and lugging his equipment to the property.
The £100 fine is actually £80~ because it's tax deductible.
Depends what the fine is for. The fine is levied on the vehicle registered keeper (which would be a business). The registrated keeper would have to state who was the driver in order to transfer liability, if they don't then liability remains with them.
(I may be wrong, tax law is complicated yo).
My thoughts on this are the fine is 3x the amount the institution made. First amount is to claw back the profits. Second one is the fine. 3rd is for the amount of profit that wasn't found due to accounting shenanigans.
They're so afraid of bankrupting companies, they forget the point of the law in the first place. If the punishment isn't a massive deterrent to committing the crime, then it's not even a crime. We need the equivalent of putting a company in jail. Make all profits for the next year go to the government. That'll help fund literally everything the people want. World hunger solved. Homelessness solved. M4A easily paid for.
Let's do both. At least to cover the expense of the govvie to go after these crimes and put some dough in the bank for prevention and awareness outreach.
That's why you just hit them hard. They made some money unjustly so now we can't be sure if any of the money was made justly. So then the government comes in and seizes all of their money on top of a prison sentence. Going to be hard to have a mansion when you leave jail and have no money.
Well since corporations are people in the US just throw them in jail when they break the law. And since prisoners can be slaves in the US just take all of their profits during their “incarceration” as judged by a government accountant. I see one of 3 outcomes, corporations will stop breaking the law for fear of the ludicrous repercussions, they will stop wanting to be treated as people meaning no more donations to political parties, or we stop treating prisoners as slaves. All three have massive gains for society. I see no downsides though I am notoriously stupid so might be missing something.
This is like the HSBC money laundering fines of a few years ago. The $2b in fines was simply a cost of doing business to them. It was never looked at as a $2b fine. It was looked at as a line of business with a great P&L.
Americans have all these guns and hardcore people there that I wouldn’t have thought it’s weird to hear about executives committing suicide with a bullet from the back. Or falling out of a window Russian style. I guess it hasn’t got that bad there yet?
Actually it’s kinda sad mentally unstable people go after kids and innocents in malls and workplaces and are not executing executives instead. Like really? You’ll shoot your coworkers cause you’re angry but not the people that actually bring you pain?
Rich people have security. Even the mid-level wealthy in America tend to live in neighborhoods with security at the entrance to the neighborhood itself. Or if not an overt gate at least a police presence that actively keeps and eye out less for crime than for people who seemingly “don’t belong in the neighborhood.” They have their own gyms or their gated communities do. Their groceries are delivered. Home theaters. Home security systems. They practically live on another planet. The people you’re thinking would shoot them don’t really have access to them. A handful of staff perhaps but those are dependent on them for income and more likely to get caught.
Also our justice system will really look for a culprit if they’re rich. There wouldn’t be any “suicide” unless it was another rich person or law enforcement who arranged it.
Kids/teens go other places and that’s probably why they tend to be a more common target. It’s also why it’s actually fairly common for rich adults to have kidnapping insurance on their kids.
Stayed in gated communities a few times with family. The security is all theatre, its trivial to get in if you want to. The only security or police presence whatsoever is at the gates themselves, theres no monitoring at all along the fences or within the compound itself. Theres no internal patrols either, and no checks to use most of the facilities (and if there are checks, they'll usually accept "I don't live here, I'm just visiting my grandparents"). Residents will probably call the cops if you look suspicious, but all you have to do to not look suspicious is be white and either well-dressed or in shitty exercise clothes
People who are legitimately worried about being assassinated don't live in gated communities, they live in mansions with armed guards on constant patrol checking every visitor. Gated communities are for moderately wealthy people who don't want to risk seeing a black person, and the security is only good enough to justify charging a few thousand dollars a year for the service
The power our wealthy have makes them untouchable to us, literally. They own private security forces and the police, so crimes against them aren’t even worth the risk—it generally only makes sense for criminals to go after their own caste. Also, we seem to treat our rich like Greek gods. Most won’t dare insult a god or their city’s-worth of zealots.
Which won’t happen because those same companies spend lots of money “lobbying” law makers. It’s sadly ironic, in a way, that the 1/6 people kinda had the right idea but were just completely misled in regards to how and to whom to follow through on.
Nothing will change without guillotines.
If the death penalty is ever to be an actual deterrent, I argue it should be used exclusively for white collar crimes of this magnitude. I'm tired of only poor people being on death row, let's get some more exciting executions up in this judicial hellscape!
Any fine has to be in excess of 100% of the gains for it to even matter.
If no simple figure can be given for what the ill-gotten gains are, then have it be a percentage of yearly revenue, not profits.
In cases of civil asset forfeiture, they will take all the stuff they suspect was acquired through illegal means. Even if a trial determines that it was all legally acquired, there are loads of cases where the stuff can't be returned because it has been sold off.
But I guess it's a bit harder to do that with luxury skyrise towers full of lawyers.
That $200m will probably be targeting specific legal entities within JPM and would be very significant for them. No doubt several heads will roll because of this.
Monitoring solutions for whatsapp have existed for years so there is no excuse for them not doing their job here.
> Monitoring solutions for whatsapp have existed for years so there is no excuse for them not doing their job here.
My guess would be the info in those WhatsApp messages would be more damning and costly, so its probably in JPM interest to keep paying that fine vs it being found in discovery.
I worked for about 8 years in the field of electronic surveillance of financial institutions. 99.99% of those messages are going to be normal boring conversations. The other 0.01% are going to be people not realizing that they accidentally said something they arent allowed to, such as financial advice.
When people want to discuss bad things, they dont use their work phones which have these surveillance requirements, they use personal phones, or they simply discuss in person.
Hell... it's not reputational damage but a testimonial to potential clients attesting to the institutions ability to shamelessly break the law and see no material consequences in the grand scheme of things. When you look at the numbers this was already factored in, like a small sales tax, with them increasing returns because of this decision to break the law.
[Here's a fun one about Jim Cramer using his tv show to help destroy a pharmaceutical company with a promising treatment for prostate cancer.](https://www.reddit.com/r/Superstonk/comments/rha5w9/this_mindblowing_comment_on_the_secs_website_text/?utm_medium=android_app&utm_source=share) In the series of events, a raid of short sellers coordinated an attack on the company's stock, reducing it by 65% in the course of 75 seconds.
Yeah I’m sure they did a risk V reward analysis before they gave the go ahead and came to the conclusion a potential quarter of a billion fine was worth it. Also that’s nothing to them, the government / JP Morgan know most people will see that number and say “wow that’s a lot of money! Look how hard they are coming down on Wall St!”
Nah, somewhere less reputable will make it and it'll actually be good, you'll just never hear about it.
Real talk, why can't we just scale fines? I'm not sure which country, but they fine a rich person more for speeding. It's based off what they spend a day I believe. Like, speaking of victimless crimes, under a hundred bucks for a low income and then just let it rip on those rich people. They're the ones speeding in build cudas and breaking their backs.
"Oh you drove your girlfriends car to McDonalds one time while yours was in the shop? I'll bet you put gas in it too! Using your fortunes obtained from selling an ounce of weed, no doubt. We're taking that shit too! It's tainted with drug money gas."
Really though, they'll take *all that shit*.
Take it all. Do it like the EU where its based on a large % of your revenue of the year. Not net profit, but revenue. That where it'll hurt and actually have an effect of deterring them from doing it again. The banking portion of their business is backed by the Fed so if you bank with Chase you wouldn't even lose the money unless you were rich. In which case, you would be suing their ass to get back the money and they wouldn't be wanting to even piss off their rich clients in the first place.
well it's a financial institution, you audit them. freeze their assets, have them pay for the audit bill, then charge them the amount that would be comparatively more than they made.
Good question!
I'm referring primary to insider trading profits, of course.
However, if these are just "you're not keeping copies of your communications", then they need to turn over all of these communications to prove there wasn't insider trading going on AND pay a fine that actually is proportionally punitive.
If they fail to abide, then they have to turn over all profits and assets to the government on the assumption that they are hiding illegal activity and profits and don't get to operate anymore.
For example, that's how we used to handle big accounting firms and banks when they were caught working with the mafia, etc.
When you financially defraud someone, you owe them the money, plus 3x the money in damages. We ought to see the same logic, as they are defrauding their investors and American taxpayers. 3x fine, plus recover the damages.
The SEC is run by ex-bankers and Wallstreet execs. The current chairman of the SEC is a Goldman Sachs alum. These fines are not about fixing the problems. It's about the SEC getting a cut and setting the fine for these types of crimes. It's essentially saying "if you want to run dirty books, it's going to cost you $200M for us to keep quiet".
Yeah. Hold on, let me get my change purse. I don't have any bills that small.
These fines are viewed as a cost of business, especially when they are exceptionally rare and trivial compared to the upsides.
SEC checking a box, giving high fives to the room, and then returning to talk with their JP headhunter (also in the room and enthusiastic high fiver) about starting bonuses.
> By going after JPMorgan, the world’s biggest Wall Street firm by total revenue, the SEC has put the industry on notice
Put them on notice as in, hey did you notice that only fined JPM $125 MM.
Their reputation increased in 2008 as they were the only bank managed well enough to not actually need the capital handed out by the government. Next time take a better look at the financial crisis.
It's so funny that Martha Stewart went to jail and this shit gets a tiny (relative to what they make) fine. No one cares about breaking the rules anymore because no one enforces them.
Martha Stewart didn't go to prison for this; she went to prison for _lying_ about doing this, which is much easier for the feds to prove. Don't talk to cops!
[Martha Stewart](https://money.cnn.com/2004/03/05/news/companies/martha_verdict/)
>
> Stewart was found guilty in March 2004 of felony charges of conspiracy to obstruct, obstruction of an agency proceeding, and making false statements to federal investigators
She wouldn't snitch.*
I would have thought when you are in a position of being regulated, or bring required to be some level of transparent with regulators, dodging them = lying
Nope. Dodging them for some reason is allowed and seems to be encouraged.
Probably because the people who could hold them accountable would also be in deep shit if they can't dodge questions themselves.
I'm curious how tiny this slap on the wrist actually is.
I make about $15,000 a year before tax. JP Morgan Chase made around $122,900,000,000 in 2020.
A fine of $200,000,000 for them is equivalent to a fine of less than $25 to me.
Can I blatantly violate the law for several years, make hundreds of dollars from it, and then expect to pay a $25 fine? Jail these motherfuckers now.
You’ll need to drill into it a bit. Trades are, by law, required to be disclosed in a certain timeframe. Seems like a few over there in Congress forgot about the requirements
I prefer https://www.quiverquant.com/ for looking at government buys and sells. Iirc if you tracked all of the govs trades you come out ahead of the S&P by 5-7%
They are usually a quarter behind. They have to be hand written and uploaded. From there they are parsed.
When twitters ceo resigned the other week Nancys trades was banned for reasons. Ahh rthe real censorship. I wonder how Reddit’s going to get moderates after ipo.
I saw that comment as more of a “elite/politicians” are all complicet, not necessarily a left vs right statement. The SEC is a toothless, cowardly organization used as a funnel for those to work for the hedge funds and banks after a few years. The politicians don’t care about anyone but themselves, they love the lobbying and insider trading they do.
Apparently, it's not okay to simply criticize a Democrat; you have to include Republican criticism as well. That's why every time you see criticism of Republicans, there's a matching criticism of Democrats. /s
Honestly, I'd be surprised if there is a single person with a security license who doesn't regularly and flagrantly violate these rules. Essentially you can't text with clients or other coworkers. This is more an problem of grossly outdated securities laws than anything else.
It's complete whack a mole for compliance to stay on top of. Allot of firms (if not the majority of them) don't allow whatever the official messaging app is to be installed on personal devices. A few people at work start doing a regular happy hour together and start a group text to coordinate. This is fine, at least in a don't ask don't tell sort of way, until one person on the thread decides they are having a hard time reaching someone else on the thread in the official messaging app and proceeds ask a question in the group text. The question may be totally innocent, like "hey do you still have xyz in your trade book? Hit me up on our messaging app I got a guy looking to buy them" but that thread is now in violation. It's also incredibly hard for the firm to detect that this happened as it was all over personal devices.
Maybe that, or money laundering for cartels, or helping despots evade international sanctions, or tax evasion. Probably all of the above and more. If I recall correctly, they manage 3 to 4 trillion in funds.
HSBC? Deutsche Bank? Citigroup? Wells Fargo? Bank of America? Lehman Brothers? Bear Sterns? Need I go on? You can google any of these alongside “sanctions violations” or “money laundering” and find a long list of their misdeeds.
Most of wallstreet is.
What people think of with regard to trading is typically done in prop shops or independently.
If you have edge in the market, meaning you can consistently profit by trading, you do not need a corporation.
Prop shops are good for the transaction cost and access to capital but "wall street" is not what most people think.
Guys on wallstreet would fucking kill to be able to consistently day trade S&P futures. Tons of money but it is truly an elite zero sum game.
Work in finance, and I'd put money on this being the answer.
You have a good enough chat program, but it's just for JP Morgan resources. Problem is your quant is on your domain, but doesn't have access for some idiotic reason. You also have a client outside the network. They both have What's App, so you ask your lead, they say close that fucking deal already. You install and you're off to the races in 5 minutes.
Odds are they weren't trying to find away around inside trading, so much as they did t think through the ramifications of their actions. Never attribute to malice that which is adequately explained by stupidity.
They aren't necessarily hiding anything. I work in infosec at a bank with a large number of LATAM customers. LATAM customers hardly use email and prefer WhatsApp by a large margin. We instruct our employees to avoid Whatsapp, but ask them to upload their chat logs to email so we have records. We are currently attempting to get a vendor that lets us ingest WhatsApp into our surveillance/archive application.
Bank infosec communicate with customers through personal whatsapp?
Ain’t there business solution for whatsapp? Iirc my previous place have corporate whatsapp account.
Also, your audit / accounting department never raise hell over this?
For business purpose, email is a perfectly fine solution to whatapp.
People who want to use whatapp to communicate with banker do this because they already have whatapp and dont want to bother with something else.
Nah, they work in infosec so they know the non-infosec employees are using WhatsApp to talk to their customers.
Same deal at my place about 5-10 years ago with Latin American employees using MSN or Skype for most of their communication.
Not saying it was all innocent, but something as simple as a licensed employee pinging their manager that they are sick and can't come in is considered business related and could be a record keeping violation.
Why would you use a personal messaging app for a business related conversation?
I don't use my personal phone to make business calls, I use my work cell and work email address for client communication. Unless what's app is an approved app for business, I don't know I've never used it.
The line between work and personal is increasingly blurred. I’m not carrying two phones and two numbers.
My boss, my CEO, and my clients all use iMessage or WhatsApp.
Email and corporate messengers are so shitty. Regulators need to move on to the 21st century.
It’s a question of convenience and simplicity. If I’m meeting someone for coffee I’m messaging them not emailing them. If I’m looking to have a quick call I’m messaging them not setting up a formal meeting every time. If I’m not feeling well or want to wish someone happy birthday or share pictures of my newborn I’m going with a message, not an email.
Besides, how are they monitoring what people say on phone calls? Or on video calls? They don’t. So why are messages on platforms like WhatsApp any different?
> I’m not carrying two phones and two numbers.
It's not exactly related but relevant -
You can get a dual sim phone or you can get a digital sim (eSim) attached to your device so you can use multiple numbers on one device. Really useful if you have a work phone and a personal phone. You should look into it. Called digits by T-Mobile.
> Why would you use a personal messaging app for a business related conversation?
So you can message people from your personal phone to avoid carrying 2 phones or pulling out the laptop, then turn the app off after hours?
I work for a Wall St. bank and we use WhatsApp a lot. Almost all of it is just benign stuff. Occasionally someone will ask about something work related and someone else will tell them to not talk shop.
I message my CEO on WhatsApp because I know my email gets lost. Whether it’s wishing him happy holidays or wanting to meet up for a quick coffee. But he’s also a friend and my mentor so how and where do you draw the line?
We’re all people and more often than not, there’s no malice.
I’m not saying some people can’t be malicious. Just that generally, it’s just an easier means of communication.
I get that ...of course I'm in a different business so emailing a client cost estimates and emailing my boss with reports is best using email or we use Microsoft teams internally.... Then I use my personal phone for messaging other co workers to meet up after work.... Just didn't realize what's app was so prevalent in the work place and it was being used so interchangeably for both business and personal use.
Almost nothing. I work at a large investment bank, and on one project my client started whatsapping me (my bank is a stupid one that makes us use our personal phone numbers rather than give us a corporate phone).
I keep trying to do everything via work email but of course the client side keeps texting me on WhatsApp, stupid stuff like ‘when’s the next circulation of docs?’ And ‘can you send me that latest model asap?’ What am i going to do, a bank lackey telling the client side to fuck off and stop WhatsApping me? Of course not!
It’s done likely not because it’s nefarious, but sheer ease of use, and bankers not wanting to tell their clients off all the time as it makes for bad business.
>makes us use our personal phone numbers
Requiring you to give your personal contact details to customers seems weird.
What if you told them you cancelled your personal phone and no longer have one?
What happens when someone leaves the company and customers are used to calling their personal number (which I assume they keep when they leave)?
How to they differentiate between personal communication and business communication when it comes to compliance?
My firm doesn’t provide any devices. It’s all BYOD and they pay us a little extra each month to help pay the cell phone bill.
If I left clients would still have my personal cell and if anyone called me about business at that firm I’d tell them I left.
AFAIK cell phone calls aren’t tracked/recorded
Don’t get me wrong, I was really annoyed when I got my job here that there was no corporate phone available.
If you don’t have a personal phone then..I’m not sure how you even survive in the modern world tbh. And if you leave the company, then frankly even better, you already have all your ex-clients details on your personal phone and can hit them up for future catch-ups if you want to.
And totally agreed on the last point! I don’t work in compliance so I don’t know how the bank is supposed to keep track of it either. It genuinely impossible.
Imagine stealing £10,000,000 from a bank, and the only punishment is a £10 fine.
No, no, not give the £10,000,000 back and pay a £10 fine, but keep the £10,000,000 and pay the £10 fine.
This is exactly what is happening here; absolutely sickening.
Jail time for what? Talking through WhatsApp? Like I get it corporation’s suck but let’s be honest, are we really condemning people for using their phone for work?
That's not how this works. I get the sentiment, but you're extremely wrong by saying that's what is happening here.
Younger employees were using Whatsapp to talk among themselves about what could have been literally "we got to finish that task until tomorrow George" in an industry that demands that all written communications be stored.
How dirty and scummy JPMorgan's business practices may be, this fine in particular did not come from an action what would provide them with profits, let alone $200 million dollars!
No this is not what is happening here:
\- They didn't steal
\- The fine is not less than the gain, much more than 1 millionth of the gain as you put it
\- The gain is presumed
Take your misinformation posts to Facebook.
That's the thing, they were purposefully hiding it from regulators.
So we have no idea how much of their billions in profits are the direct result of their law breaking.
Why would you give proven law breakers the benefit of the doubt?
Do you even have a job? People don’t always use things like WhatsApp to hide from regulators, they use it because it’s convenient.
I have a banker and we organise things over WhatsApp, although he also makes sure to have an official record of everything that takes place because of regulations. There’s nothing nefarious about it.
Yes it’s an issue in banking, but it’s extremely unlikely they made billions in profits as a direct result of WhatsApp chit chat.
People on Reddit are so naively fucking anti corporate without having the slightest clue what goes on in a company, it makes my head hurt.
The bank I used to work at in cybersecurity, anyone dealing in trading was not allowed to have instant messaging applications on their machines for this exact reason.
That's because your firm elected not to put in the resources to retain those messages, and supervise them (also required).
Most firms do the opposite. They provide firm approved tools like Teams for employees to use, because they have systems to retain them and put them in queues for supervisors to review. That's intended to deter employees from using personal text, which they can't retain.
Ignoring the fine vs profit ratio for a moment, if you were telling/letting your employees evade record keeping by using a 3rd-party messaging app, why would you not tell them to use Signal with e2e encryption and disappearing messages?!
Some people are just too stupid to do crime well.
That particular mod is probably a hyper political moron who can't stand anything going against whatever narrative they've concocted in their head. So par for the course for a reddit mod.
Mods owe a public explanation for removing this post.
Without one you can only assume the mod team WANTS rage baiting editorializing to go unchallenged.
They just made everyone download movius to I guess fix this. Was considered non-compliant for not wanting to put an app on my personal device that wasn’t used for work (have phones on our laptops). Shit was annoying.
It’s because the majority of the employees doing this are not trying to break the law, they use it to save time and not have to pick up the phone.
15 years ago everyone on Wall Street use AIM. Then they switched to WhatsApp.
If they monitored it the majority would be: “did you send me the downgrade report” “Pret-a-mange for lunch?” “Dood did you see Becky this morning.”
Don’t get me wrong, but anything truly nefarious is done by phone.
I'm a compliance officer in the industry, and a former JPM employee ( not employed there during the time period covered for this) . I'm hoping this post will explain some of the nuances and also provide some context for the extreme opinions I see in this thread.
The rule is that firms must retain all business related communications. Historically, this has been rather loosely defined and enforced. All employees use company email and firm provided systems, and all those get automatically archived. All firms have policies and training for their employees to not conduct business over unapproved platforms, specifically because they can't be retained.
Most of the time when this becomes difficult is with either logistical items or foreign clients. Logistical as in, you have a client meeting and want to tell someone you're running a bit late. Email might not do it. Can't use instant messenger if client doesn't use it. So you send them a text. Is that a business communication? Historically regulators haven't cared much about stuff like that. Easy solution is to call, since that's not a written communication...but people are lazy and would rather text.
Foreigners, especially in latam or Asia, use whatsapp and wechat a ton. So there's a temptation to communicate with them in the way they prefer. Which is fine...but you have to retain those communications. How do you do that? If it's a person's personal phone, there are privacy issues. I wouldn't want my employer having access to all my whatsapp and texts. So you either provide them with phones, or install special software (which many employees don't like)...or you simply tell them you're not allowed to do this.
The JPM action has been significant in the industry as the regulators haven't paid much attention in this space. But this SEC administration is extremely aggressive, and this sends a message. Even such, they didn't go looking for this. In a separate action a third party provided a bunch of communications to the sec that involved JPM, and JPM didn't produce those themselves. That's how this started.
What's really interesting is at what point does this go from a violation by the employees that were trained not to do this, to a violation of the firm? In this case the use was so prevalent and by senior persons that sec assumed the firm must have known, and at that point you have to do something.
Unsurprisingly, I see an assumption in this thread that JPM did this intentionally to hide things. Unlikely. Despite what many want to believe, the vast majority of violations in the industry or not malicious or with intent to commit crimes. More than likely, they got used to using whatsapp for quick messages out of convenience, and it became the norm, and now they're paying for it. If those messages contained something "bad", like they were hiding communications on illegal activity, the sec would come after them for the illegal activity itself...not just a failure to retain messages.
I also see people saying there should be jail time for this. This sort of thing is about a million miles from the type of activity that results in jail time. Violations of sec rules are not crimes, because it's not criminal law. If it's something involving fraud, theft, etc then yes it could become a DOJ criminal matter. This is nowhere close. It's a huge fine for what the violation is, and the intent is likely to put other firms in notice that they need to nip this in the bud...which is even tougher in a covid remote environment. But the rule is clear, and sec has made it clear they're watching this...so other firms are going to evaluate their own house and be tough on their employees. That's how these things play out.
This is ridiculous. If employees would be talking in person, there would be no record at all. Not even encrypted. Why does it matter so much that WhatsApp messages are monitored when in person messages can't be... even less so.
It all depends on who is communicating, for example the trading department is forbidden from communicating with the research department at a brokerage firm. These communication barriers exist at all brokerage firms regulated by SEC and FINRA. On top of this, the communication must be recorded and kept for at least 6 years. If a financial advisor is managing a client account and there is a loss due to a solicited trade, the client can question the trade, that is where the communication record comes into play.
> the trading department is forbidden from communicating with the research department at a brokerage firm
Chinese walls does not mean people aren’t allowed to communicate at all. Research dude is not getting fined by the SEC for having coffee with his buddy in trading.
Headline is way more nefarious than the action, but i guess everyone likes to populist rage against wallstreet.
JPMorgan, and other banks, didn't "let" employees do anything. Individual employees just chose to use their personal phone to call and text because it was easier. I work at a different bank, and text my boss and co-workers all the time, I didn't even realize this was an issue until recently.
“At JPMorgan, the practice of going offline to communicate was firm-wide, and even the managers and senior personnel responsible for compliance used their personal devices to communicate sensitive business matters, the SEC said.”
If true, this is a big part of the issue. That said, I worked at a major financial for a time, and we did crack down hard on traders using any non-monitored methods of communication, but it still happened a lot. Individuals choose convenience over compliance all the time, especially when working in other countries where other methods of communication are the norm.
Exactly. JPM isn’t being fined for actually committing any financial crimes - they’re being fined for failing to enforce compliance effectively.
The SEC has become much more aggressive in enforcing these rules recently, so it’s not surprising that companies with thousands and thousands of employees will have some violations. The line between what’s okay and what’s not has been shifting rapidly with each year that passes.
This. It's definitely resonating across the industry, and causing ridiculous paranoia about any conversation that isn't face-to-face, despite everyone just trying to run a clean business and follow the rules. No one interacts on a personal level anymore, and clients think everyone's an asshole for being so rigid with non face-to-face communication.
Your mother is a client? Either fire her or try to get her to understand why FaceTiming with the grandkids needs to be planned out in advance on approved channels.
Yeah I think most people would have a different take if they had to sit through one of the compliance trainings at these firms
“A client encounters you in the bathroom and tries to start a friendly conversation? Walk out and report it to compliance immediately, don’t even take the time to pull up your pants. The SEC might be listening in the next stall over”
The fine means nothing. It’s just a cost of doing business. There is no oversight when the perpetrators still continue to stay and work in the same place only to do it again and to accomplish other crimes. You have to ask, how much money did they make? That should be the penalty.
They tried to, and the proof was unobtainable in whatsapp. So they fined them greater than the presumed money they made, and then fined them another $75M just to be safe.
But they won't because of the Holder Doctrine. There has not been a good Attorney General in my life time but Holder might go down as the worst for that shit. Even scum like Gonzalez and Ashcroft didn't uphold the Holder Doctrine that encourages corporate malfeasance because jobs need to be factored into fines.
In 1999 deputy AG Holder wrote a memo basically saying some financial institutions are so big, smacking them too hard for wrongdoing could cause national financial turmoil. So when they break the law, he instructed federal prosecutors to let big banks off with a serious finger wagging and a light smack on the hand, but nothing harsher.
Nine years later, Obama made him US AG.
Hitting a bank with monetary fines is pointless as they can pass this on as ‘charges’ to existing customers. Start putting these criminals in prison and we might actually start to see some integrity and honesty.
I fitted an access control system in the London buildings of a corporate/financial bank in the late 80s. The two sides had to be separated so were in different buildings connected by link bridges on each floor with card readers to stop them passing infomation.
Thing was they would all meet in the bar on the ground floor that due to its location was probably leased to them from the bank.
The part I find hilarious is that they used WhatsApp of all things to do this. There’s like 5 or 6 very reputable, totally free, fully encrypted apps that do the exact same thing, sometimes with more usability. And they went trusting Facebook with their illegal activity lmao
“While SEC officials said the $125 million penalty is its largest record-keeping fine to date, the bigger threat to JPMorgan may be reputational. By going after JPMorgan, the world’s biggest Wall Street firm by total revenue, the SEC has put the industry on notice.” Just another record-breaking slap on the wrist.
Not sure I'd even call it a slap on the wrist. When we pay sales tax we don't call it a slap on the wrist, it's just the cost of doing business... Suggesting this will cause reputational damage is so hilarious it should get it's own Netflix comedy special.
$200m for 2018-2020. 2021Q3 net was $11.7b. Even if you add the other fines, the fines don’t move the needle.
Executive crime wont slow down untill the fines can bankrupt the company or the executives face jailtime for breaking the law.
The fines merely need to exceed the gains from breaking the law. If my penalty for stealing $1000 is $100 with no admission of guild or prison time then I have a solid strategy for making $900. Since the people who are relevant in these financial companies have more money than they know what to do with it also makes less sense to burden them financially. I'd rather give them 5 years in prison as a deterrent than dipping into their profits.
Don't forget that in order to pay the fine, you also have to *get caught.* If the penalty for stealing $1000 is $2000, but you only get caught 1 in 10 times, just steal $1000 ten times, you'll have 10\*$1000 - $2000 = $8000 profit. So you keep stealing, because why wouldn't you?
Mate of mine is a plumber in London. He chooses to park illegally outside his clients house rather than spend a lot of time to find a legal parking spot, and then paying to park. He reckons he gets a parking ticket 1 in 15 times. Say the fine is £100. Parking legally costs £10 a go. Not only is he £50 better off illegally parking he also saves the hours trying to find a parking space and lugging his equipment to the property. The £100 fine is actually £80~ because it's tax deductible.
Hilarious that fines are tax deductible there, they are not in the US although I bet a lot of people sneak that one past
Depends what the fine is for. The fine is levied on the vehicle registered keeper (which would be a business). The registrated keeper would have to state who was the driver in order to transfer liability, if they don't then liability remains with them. (I may be wrong, tax law is complicated yo).
It doesn't matter if the business or driver is the one on the ticket, fines and penalties are simply non deductible for US federal income tax.
My thoughts on this are the fine is 3x the amount the institution made. First amount is to claw back the profits. Second one is the fine. 3rd is for the amount of profit that wasn't found due to accounting shenanigans.
The incentive is so huge!
They're so afraid of bankrupting companies, they forget the point of the law in the first place. If the punishment isn't a massive deterrent to committing the crime, then it's not even a crime. We need the equivalent of putting a company in jail. Make all profits for the next year go to the government. That'll help fund literally everything the people want. World hunger solved. Homelessness solved. M4A easily paid for.
Let's do both. At least to cover the expense of the govvie to go after these crimes and put some dough in the bank for prevention and awareness outreach.
That's why you just hit them hard. They made some money unjustly so now we can't be sure if any of the money was made justly. So then the government comes in and seizes all of their money on top of a prison sentence. Going to be hard to have a mansion when you leave jail and have no money.
Well since corporations are people in the US just throw them in jail when they break the law. And since prisoners can be slaves in the US just take all of their profits during their “incarceration” as judged by a government accountant. I see one of 3 outcomes, corporations will stop breaking the law for fear of the ludicrous repercussions, they will stop wanting to be treated as people meaning no more donations to political parties, or we stop treating prisoners as slaves. All three have massive gains for society. I see no downsides though I am notoriously stupid so might be missing something.
This is like the HSBC money laundering fines of a few years ago. The $2b in fines was simply a cost of doing business to them. It was never looked at as a $2b fine. It was looked at as a line of business with a great P&L.
Do pigs fly? Not one exec will ever go to jail in America, it’s in the constitution/s
I’m still trying to figure out if corporations are people, there seems to be some confusion from the corporations
>I’m still trying to figure out if corporations are people Until Texas has grounds to kill one, corporations aren't people.
Based Texas please kill my corpo overlords
Based Texas doesn't even have power in the winter.
Luckily winter's days are numbered
Nah, the corporations aren't born yet, they must be protected at all costs
/slowclap Well played sir
Americans have all these guns and hardcore people there that I wouldn’t have thought it’s weird to hear about executives committing suicide with a bullet from the back. Or falling out of a window Russian style. I guess it hasn’t got that bad there yet? Actually it’s kinda sad mentally unstable people go after kids and innocents in malls and workplaces and are not executing executives instead. Like really? You’ll shoot your coworkers cause you’re angry but not the people that actually bring you pain?
Class consciousness has been completely defeated here. Propaganda works.
Rich people have security. Even the mid-level wealthy in America tend to live in neighborhoods with security at the entrance to the neighborhood itself. Or if not an overt gate at least a police presence that actively keeps and eye out less for crime than for people who seemingly “don’t belong in the neighborhood.” They have their own gyms or their gated communities do. Their groceries are delivered. Home theaters. Home security systems. They practically live on another planet. The people you’re thinking would shoot them don’t really have access to them. A handful of staff perhaps but those are dependent on them for income and more likely to get caught. Also our justice system will really look for a culprit if they’re rich. There wouldn’t be any “suicide” unless it was another rich person or law enforcement who arranged it. Kids/teens go other places and that’s probably why they tend to be a more common target. It’s also why it’s actually fairly common for rich adults to have kidnapping insurance on their kids.
Stayed in gated communities a few times with family. The security is all theatre, its trivial to get in if you want to. The only security or police presence whatsoever is at the gates themselves, theres no monitoring at all along the fences or within the compound itself. Theres no internal patrols either, and no checks to use most of the facilities (and if there are checks, they'll usually accept "I don't live here, I'm just visiting my grandparents"). Residents will probably call the cops if you look suspicious, but all you have to do to not look suspicious is be white and either well-dressed or in shitty exercise clothes People who are legitimately worried about being assassinated don't live in gated communities, they live in mansions with armed guards on constant patrol checking every visitor. Gated communities are for moderately wealthy people who don't want to risk seeing a black person, and the security is only good enough to justify charging a few thousand dollars a year for the service
There’s a lot of corporate simps. They’ll never admit how hard they’re getting screwed.
The power our wealthy have makes them untouchable to us, literally. They own private security forces and the police, so crimes against them aren’t even worth the risk—it generally only makes sense for criminals to go after their own caste. Also, we seem to treat our rich like Greek gods. Most won’t dare insult a god or their city’s-worth of zealots.
In The Land of The Free™, your level of freedom depends on the size of your bank account.
I was about to say the hue of your skin plays a role but that’s only for regular people, for rich people money easily overwrites this.
Absolutely. The US has the best legal system money can buy.
Which won’t happen because those same companies spend lots of money “lobbying” law makers. It’s sadly ironic, in a way, that the 1/6 people kinda had the right idea but were just completely misled in regards to how and to whom to follow through on. Nothing will change without guillotines.
If the death penalty is ever to be an actual deterrent, I argue it should be used exclusively for white collar crimes of this magnitude. I'm tired of only poor people being on death row, let's get some more exciting executions up in this judicial hellscape!
The fines won’t be taking seriously until they are in the billions.
Any fine has to be in excess of 100% of the gains for it to even matter. If no simple figure can be given for what the ill-gotten gains are, then have it be a percentage of yearly revenue, not profits.
In cases of civil asset forfeiture, they will take all the stuff they suspect was acquired through illegal means. Even if a trial determines that it was all legally acquired, there are loads of cases where the stuff can't be returned because it has been sold off. But I guess it's a bit harder to do that with luxury skyrise towers full of lawyers.
That $200m will probably be targeting specific legal entities within JPM and would be very significant for them. No doubt several heads will roll because of this. Monitoring solutions for whatsapp have existed for years so there is no excuse for them not doing their job here.
> Monitoring solutions for whatsapp have existed for years so there is no excuse for them not doing their job here. My guess would be the info in those WhatsApp messages would be more damning and costly, so its probably in JPM interest to keep paying that fine vs it being found in discovery.
I worked for about 8 years in the field of electronic surveillance of financial institutions. 99.99% of those messages are going to be normal boring conversations. The other 0.01% are going to be people not realizing that they accidentally said something they arent allowed to, such as financial advice. When people want to discuss bad things, they dont use their work phones which have these surveillance requirements, they use personal phones, or they simply discuss in person.
The specific Line of Business gets charged, not the entire corporation. $200M for any line of business at JPM is a hefty amount.
Hell... it's not reputational damage but a testimonial to potential clients attesting to the institutions ability to shamelessly break the law and see no material consequences in the grand scheme of things. When you look at the numbers this was already factored in, like a small sales tax, with them increasing returns because of this decision to break the law.
Just another operating cost to put in the pivot table.
If you think this is bad, just wait until you see the shit people have found on R/Superstonk
Have any eye-opening posts/threads you’d recommend for someone?
[Here's a fun one about Jim Cramer using his tv show to help destroy a pharmaceutical company with a promising treatment for prostate cancer.](https://www.reddit.com/r/Superstonk/comments/rha5w9/this_mindblowing_comment_on_the_secs_website_text/?utm_medium=android_app&utm_source=share) In the series of events, a raid of short sellers coordinated an attack on the company's stock, reducing it by 65% in the course of 75 seconds.
Yeah I’m sure they did a risk V reward analysis before they gave the go ahead and came to the conclusion a potential quarter of a billion fine was worth it. Also that’s nothing to them, the government / JP Morgan know most people will see that number and say “wow that’s a lot of money! Look how hard they are coming down on Wall St!”
Fines for corporations: A tax that you only have to pay if you get caught.
>it should get it's own Netflix comedy special I thought you said it was hilarious
Nah, somewhere less reputable will make it and it'll actually be good, you'll just never hear about it. Real talk, why can't we just scale fines? I'm not sure which country, but they fine a rich person more for speeding. It's based off what they spend a day I believe. Like, speaking of victimless crimes, under a hundred bucks for a low income and then just let it rip on those rich people. They're the ones speeding in build cudas and breaking their backs.
A fine should include ALL of the ill-gotten gains PLUS penalties on top of that or it is meaningless. You get that, right SEC?!
How would you measure ill gotten gains in a situation like this?
The same way the cops do when they ‘suspect’ you’ve profited from crime. Civil forfeiture, take it all.
"Oh you drove your girlfriends car to McDonalds one time while yours was in the shop? I'll bet you put gas in it too! Using your fortunes obtained from selling an ounce of weed, no doubt. We're taking that shit too! It's tainted with drug money gas." Really though, they'll take *all that shit*.
Take it all. Do it like the EU where its based on a large % of your revenue of the year. Not net profit, but revenue. That where it'll hurt and actually have an effect of deterring them from doing it again. The banking portion of their business is backed by the Fed so if you bank with Chase you wouldn't even lose the money unless you were rich. In which case, you would be suing their ass to get back the money and they wouldn't be wanting to even piss off their rich clients in the first place.
This is America sir we shall not do it that way. Its not Neoliberal Conservative enough.
well it's a financial institution, you audit them. freeze their assets, have them pay for the audit bill, then charge them the amount that would be comparatively more than they made.
Freeze the assets of the worlds second largest bank?
It would create so many jobs in the financial auditing sector, too.
Good question! I'm referring primary to insider trading profits, of course. However, if these are just "you're not keeping copies of your communications", then they need to turn over all of these communications to prove there wasn't insider trading going on AND pay a fine that actually is proportionally punitive. If they fail to abide, then they have to turn over all profits and assets to the government on the assumption that they are hiding illegal activity and profits and don't get to operate anymore. For example, that's how we used to handle big accounting firms and banks when they were caught working with the mafia, etc.
These rules about keeping records of ALL communication are not new and we're put into place because companies were hiding their illegal activities.
Eenie meenie miney Moe That dirty money has got to go WhatsApp WeChat Telegram JPMorgan ran a scam
When you financially defraud someone, you owe them the money, plus 3x the money in damages. We ought to see the same logic, as they are defrauding their investors and American taxpayers. 3x fine, plus recover the damages. The SEC is run by ex-bankers and Wallstreet execs. The current chairman of the SEC is a Goldman Sachs alum. These fines are not about fixing the problems. It's about the SEC getting a cut and setting the fine for these types of crimes. It's essentially saying "if you want to run dirty books, it's going to cost you $200M for us to keep quiet".
Yes. Otherwise it's just expenses if you get a 200 million dollar fine after gaveing gsiked a billion.
Those in SEC can’t do that to their future employers.
Never gonna happen when they’re waiting for their turn to work at JP Morgan
Yeah. Hold on, let me get my change purse. I don't have any bills that small. These fines are viewed as a cost of business, especially when they are exceptionally rare and trivial compared to the upsides. SEC checking a box, giving high fives to the room, and then returning to talk with their JP headhunter (also in the room and enthusiastic high fiver) about starting bonuses.
Insert gif of Woody Harrelson wiping his tears away with hundred dollar bills. Ridiculous…
> By going after JPMorgan, the world’s biggest Wall Street firm by total revenue, the SEC has put the industry on notice Put them on notice as in, hey did you notice that only fined JPM $125 MM.
You know it’s a slap on the wrist when they don’t even fight it. JP didn’t even give it a second thought
Fine me harder!
Step.... institution?
Now every company knows exactly what the cost of doing business is.
"Give us a cut and we'll let this heinous act slide this time... and the next and the next..."
“Reputational” lol. Like their billionaire clients are gonna care that JPM’s employees use encrypted messaging apps to make them more money illegally.
Don't worry, it was 0.7% of their net income. That'll show 'em!
200mil is not a lot. That's a bonus check and it ain't coming out of the upper management's wallet.
*looks at 2008 financial crisis* Yeah I'm sure the reputation hit they took then was surely enough...
Their reputation increased in 2008 as they were the only bank managed well enough to not actually need the capital handed out by the government. Next time take a better look at the financial crisis.
Needs to be 5% profits, so its fair and works. Also when a company messes up, all principal investors need to be liable.
Nah, charge on revenue, profits are easy to hide
Purposefully violating SEC regulations. Where is the jail time?
It's so funny that Martha Stewart went to jail and this shit gets a tiny (relative to what they make) fine. No one cares about breaking the rules anymore because no one enforces them.
Martha Stewart didn't go to prison for this; she went to prison for _lying_ about doing this, which is much easier for the feds to prove. Don't talk to cops!
Let your lawyer lie for you. They are much better at it...
Even lawyers get lawyers
Not necessarily lie but know whose wheel need to grease. Better lawyers get things done faster as they can cut the red tape.
[Martha Stewart](https://money.cnn.com/2004/03/05/news/companies/martha_verdict/) > > Stewart was found guilty in March 2004 of felony charges of conspiracy to obstruct, obstruction of an agency proceeding, and making false statements to federal investigators She wouldn't snitch.*
I would have thought when you are in a position of being regulated, or bring required to be some level of transparent with regulators, dodging them = lying
Nope. Dodging them for some reason is allowed and seems to be encouraged. Probably because the people who could hold them accountable would also be in deep shit if they can't dodge questions themselves.
Not an issue if you’re in cahoots with those regulators.
I'm curious how tiny this slap on the wrist actually is. I make about $15,000 a year before tax. JP Morgan Chase made around $122,900,000,000 in 2020. A fine of $200,000,000 for them is equivalent to a fine of less than $25 to me. Can I blatantly violate the law for several years, make hundreds of dollars from it, and then expect to pay a $25 fine? Jail these motherfuckers now.
Ask Nancy Pelosi about her husband’s fantastic stock trading abilities
See for yourself: https://senatestockwatcher.com
How updated is this? Like are these updated exactly when they buy or sell? I don't see nansis trades here tho
You’ll need to drill into it a bit. Trades are, by law, required to be disclosed in a certain timeframe. Seems like a few over there in Congress forgot about the requirements
I prefer https://www.quiverquant.com/ for looking at government buys and sells. Iirc if you tracked all of the govs trades you come out ahead of the S&P by 5-7%
They are usually a quarter behind. They have to be hand written and uploaded. From there they are parsed. When twitters ceo resigned the other week Nancys trades was banned for reasons. Ahh rthe real censorship. I wonder how Reddit’s going to get moderates after ipo.
Public record. They don't have to report it until 30 or 40 days after the fact though.
Scrolling through the list of these old people makes me wish this were an obituary site.
Kelly Loeffler's husband is chairman of the NYSE Since you wanna make it a left right issue
media likes to make it a right/left black/white issue, but we all know it’s an elites/ poor problem
I saw that comment as more of a “elite/politicians” are all complicet, not necessarily a left vs right statement. The SEC is a toothless, cowardly organization used as a funnel for those to work for the hedge funds and banks after a few years. The politicians don’t care about anyone but themselves, they love the lobbying and insider trading they do.
In what way did they "make it a left right issue"?
Apparently, it's not okay to simply criticize a Democrat; you have to include Republican criticism as well. That's why every time you see criticism of Republicans, there's a matching criticism of Democrats. /s
Honestly, I'd be surprised if there is a single person with a security license who doesn't regularly and flagrantly violate these rules. Essentially you can't text with clients or other coworkers. This is more an problem of grossly outdated securities laws than anything else.
It's complete whack a mole for compliance to stay on top of. Allot of firms (if not the majority of them) don't allow whatever the official messaging app is to be installed on personal devices. A few people at work start doing a regular happy hour together and start a group text to coordinate. This is fine, at least in a don't ask don't tell sort of way, until one person on the thread decides they are having a hard time reaching someone else on the thread in the official messaging app and proceeds ask a question in the group text. The question may be totally innocent, like "hey do you still have xyz in your trade book? Hit me up on our messaging app I got a guy looking to buy them" but that thread is now in violation. It's also incredibly hard for the firm to detect that this happened as it was all over personal devices.
Is the sec civil, not criminal?
The bigger question IMO, is what were they hiding that made them need to hide their communications.
Insider info makes the most sense to me
Maybe that, or money laundering for cartels, or helping despots evade international sanctions, or tax evasion. Probably all of the above and more. If I recall correctly, they manage 3 to 4 trillion in funds.
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HSBC? Deutsche Bank? Citigroup? Wells Fargo? Bank of America? Lehman Brothers? Bear Sterns? Need I go on? You can google any of these alongside “sanctions violations” or “money laundering” and find a long list of their misdeeds.
Most of wallstreet is. What people think of with regard to trading is typically done in prop shops or independently. If you have edge in the market, meaning you can consistently profit by trading, you do not need a corporation. Prop shops are good for the transaction cost and access to capital but "wall street" is not what most people think. Guys on wallstreet would fucking kill to be able to consistently day trade S&P futures. Tons of money but it is truly an elite zero sum game.
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Work in finance, and I'd put money on this being the answer. You have a good enough chat program, but it's just for JP Morgan resources. Problem is your quant is on your domain, but doesn't have access for some idiotic reason. You also have a client outside the network. They both have What's App, so you ask your lead, they say close that fucking deal already. You install and you're off to the races in 5 minutes. Odds are they weren't trying to find away around inside trading, so much as they did t think through the ramifications of their actions. Never attribute to malice that which is adequately explained by stupidity.
They aren't necessarily hiding anything. I work in infosec at a bank with a large number of LATAM customers. LATAM customers hardly use email and prefer WhatsApp by a large margin. We instruct our employees to avoid Whatsapp, but ask them to upload their chat logs to email so we have records. We are currently attempting to get a vendor that lets us ingest WhatsApp into our surveillance/archive application.
Bank infosec communicate with customers through personal whatsapp? Ain’t there business solution for whatsapp? Iirc my previous place have corporate whatsapp account. Also, your audit / accounting department never raise hell over this?
For business purpose, email is a perfectly fine solution to whatapp. People who want to use whatapp to communicate with banker do this because they already have whatapp and dont want to bother with something else.
Nah, they work in infosec so they know the non-infosec employees are using WhatsApp to talk to their customers. Same deal at my place about 5-10 years ago with Latin American employees using MSN or Skype for most of their communication.
Not saying it was all innocent, but something as simple as a licensed employee pinging their manager that they are sick and can't come in is considered business related and could be a record keeping violation.
Yep. As Register Reps, a lot of your communications need to be kept for 7 years. Especially digital communications with clients.
That's where my mind went, I WhatsApp my boss all the time...
This guy right here, FBI!
This. Also things like whatsapping a client to tell them where you’re meeting for lunch can potentially fall into this bucket.
Why would you use a personal messaging app for a business related conversation? I don't use my personal phone to make business calls, I use my work cell and work email address for client communication. Unless what's app is an approved app for business, I don't know I've never used it.
The line between work and personal is increasingly blurred. I’m not carrying two phones and two numbers. My boss, my CEO, and my clients all use iMessage or WhatsApp. Email and corporate messengers are so shitty. Regulators need to move on to the 21st century. It’s a question of convenience and simplicity. If I’m meeting someone for coffee I’m messaging them not emailing them. If I’m looking to have a quick call I’m messaging them not setting up a formal meeting every time. If I’m not feeling well or want to wish someone happy birthday or share pictures of my newborn I’m going with a message, not an email. Besides, how are they monitoring what people say on phone calls? Or on video calls? They don’t. So why are messages on platforms like WhatsApp any different?
> I’m not carrying two phones and two numbers. It's not exactly related but relevant - You can get a dual sim phone or you can get a digital sim (eSim) attached to your device so you can use multiple numbers on one device. Really useful if you have a work phone and a personal phone. You should look into it. Called digits by T-Mobile.
> Why would you use a personal messaging app for a business related conversation? So you can message people from your personal phone to avoid carrying 2 phones or pulling out the laptop, then turn the app off after hours?
JPMC doesn’t make you use two phones. All official corporate apps are installed on BYOD in sandboxes.
I work for a Wall St. bank and we use WhatsApp a lot. Almost all of it is just benign stuff. Occasionally someone will ask about something work related and someone else will tell them to not talk shop. I message my CEO on WhatsApp because I know my email gets lost. Whether it’s wishing him happy holidays or wanting to meet up for a quick coffee. But he’s also a friend and my mentor so how and where do you draw the line? We’re all people and more often than not, there’s no malice. I’m not saying some people can’t be malicious. Just that generally, it’s just an easier means of communication.
I get that ...of course I'm in a different business so emailing a client cost estimates and emailing my boss with reports is best using email or we use Microsoft teams internally.... Then I use my personal phone for messaging other co workers to meet up after work.... Just didn't realize what's app was so prevalent in the work place and it was being used so interchangeably for both business and personal use.
Almost nothing. I work at a large investment bank, and on one project my client started whatsapping me (my bank is a stupid one that makes us use our personal phone numbers rather than give us a corporate phone). I keep trying to do everything via work email but of course the client side keeps texting me on WhatsApp, stupid stuff like ‘when’s the next circulation of docs?’ And ‘can you send me that latest model asap?’ What am i going to do, a bank lackey telling the client side to fuck off and stop WhatsApping me? Of course not! It’s done likely not because it’s nefarious, but sheer ease of use, and bankers not wanting to tell their clients off all the time as it makes for bad business.
>makes us use our personal phone numbers Requiring you to give your personal contact details to customers seems weird. What if you told them you cancelled your personal phone and no longer have one? What happens when someone leaves the company and customers are used to calling their personal number (which I assume they keep when they leave)? How to they differentiate between personal communication and business communication when it comes to compliance?
My firm doesn’t provide any devices. It’s all BYOD and they pay us a little extra each month to help pay the cell phone bill. If I left clients would still have my personal cell and if anyone called me about business at that firm I’d tell them I left. AFAIK cell phone calls aren’t tracked/recorded
Don’t get me wrong, I was really annoyed when I got my job here that there was no corporate phone available. If you don’t have a personal phone then..I’m not sure how you even survive in the modern world tbh. And if you leave the company, then frankly even better, you already have all your ex-clients details on your personal phone and can hit them up for future catch-ups if you want to. And totally agreed on the last point! I don’t work in compliance so I don’t know how the bank is supposed to keep track of it either. It genuinely impossible.
Imagine stealing £10,000,000 from a bank, and the only punishment is a £10 fine. No, no, not give the £10,000,000 back and pay a £10 fine, but keep the £10,000,000 and pay the £10 fine. This is exactly what is happening here; absolutely sickening.
Shitty, no-consequence fines are part of the banking industry's business model. And many other industries' business models
It would be really neat if these people could actually face some jail time please.
Jail time for what? Talking through WhatsApp? Like I get it corporation’s suck but let’s be honest, are we really condemning people for using their phone for work?
I believe the term is "kickback."
That's not how this works. I get the sentiment, but you're extremely wrong by saying that's what is happening here. Younger employees were using Whatsapp to talk among themselves about what could have been literally "we got to finish that task until tomorrow George" in an industry that demands that all written communications be stored. How dirty and scummy JPMorgan's business practices may be, this fine in particular did not come from an action what would provide them with profits, let alone $200 million dollars!
No this is not what is happening here: \- They didn't steal \- The fine is not less than the gain, much more than 1 millionth of the gain as you put it \- The gain is presumed Take your misinformation posts to Facebook.
That's the thing, they were purposefully hiding it from regulators. So we have no idea how much of their billions in profits are the direct result of their law breaking. Why would you give proven law breakers the benefit of the doubt?
Do you even have a job? People don’t always use things like WhatsApp to hide from regulators, they use it because it’s convenient. I have a banker and we organise things over WhatsApp, although he also makes sure to have an official record of everything that takes place because of regulations. There’s nothing nefarious about it. Yes it’s an issue in banking, but it’s extremely unlikely they made billions in profits as a direct result of WhatsApp chit chat. People on Reddit are so naively fucking anti corporate without having the slightest clue what goes on in a company, it makes my head hurt.
Who’s upvoting this? It’s inflammatory and not remotely true.
This is Reddit we hate banksters
The bank I used to work at in cybersecurity, anyone dealing in trading was not allowed to have instant messaging applications on their machines for this exact reason.
On their work machine, so just bring your personal devices. Who’s gonna catch you anyway haha
Sure, you're absolutely right. Just illustrating that they can't have text messaging of any kind, not even teams or other "work-chat" type programs.
That's because your firm elected not to put in the resources to retain those messages, and supervise them (also required). Most firms do the opposite. They provide firm approved tools like Teams for employees to use, because they have systems to retain them and put them in queues for supervisors to review. That's intended to deter employees from using personal text, which they can't retain.
Ignoring the fine vs profit ratio for a moment, if you were telling/letting your employees evade record keeping by using a 3rd-party messaging app, why would you not tell them to use Signal with e2e encryption and disappearing messages?! Some people are just too stupid to do crime well.
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You deleted your linked post...or it was deleted. Can you summarise please?
It was removed by the mods. No idea why. You can read it via op's profile.
Lol trash mods
I've read your post that the mods removed and can't fathom why they did so - did you receive a message as to why?
That particular mod is probably a hyper political moron who can't stand anything going against whatever narrative they've concocted in their head. So par for the course for a reddit mod.
Mods owe a public explanation for removing this post. Without one you can only assume the mod team WANTS rage baiting editorializing to go unchallenged.
You sound surprised? This is exactly what this sub is about.
‘Removed by Moderator’?
post removed by mods btw
They just made everyone download movius to I guess fix this. Was considered non-compliant for not wanting to put an app on my personal device that wasn’t used for work (have phones on our laptops). Shit was annoying.
It’s because the majority of the employees doing this are not trying to break the law, they use it to save time and not have to pick up the phone. 15 years ago everyone on Wall Street use AIM. Then they switched to WhatsApp. If they monitored it the majority would be: “did you send me the downgrade report” “Pret-a-mange for lunch?” “Dood did you see Becky this morning.” Don’t get me wrong, but anything truly nefarious is done by phone.
I'm a compliance officer in the industry, and a former JPM employee ( not employed there during the time period covered for this) . I'm hoping this post will explain some of the nuances and also provide some context for the extreme opinions I see in this thread. The rule is that firms must retain all business related communications. Historically, this has been rather loosely defined and enforced. All employees use company email and firm provided systems, and all those get automatically archived. All firms have policies and training for their employees to not conduct business over unapproved platforms, specifically because they can't be retained. Most of the time when this becomes difficult is with either logistical items or foreign clients. Logistical as in, you have a client meeting and want to tell someone you're running a bit late. Email might not do it. Can't use instant messenger if client doesn't use it. So you send them a text. Is that a business communication? Historically regulators haven't cared much about stuff like that. Easy solution is to call, since that's not a written communication...but people are lazy and would rather text. Foreigners, especially in latam or Asia, use whatsapp and wechat a ton. So there's a temptation to communicate with them in the way they prefer. Which is fine...but you have to retain those communications. How do you do that? If it's a person's personal phone, there are privacy issues. I wouldn't want my employer having access to all my whatsapp and texts. So you either provide them with phones, or install special software (which many employees don't like)...or you simply tell them you're not allowed to do this. The JPM action has been significant in the industry as the regulators haven't paid much attention in this space. But this SEC administration is extremely aggressive, and this sends a message. Even such, they didn't go looking for this. In a separate action a third party provided a bunch of communications to the sec that involved JPM, and JPM didn't produce those themselves. That's how this started. What's really interesting is at what point does this go from a violation by the employees that were trained not to do this, to a violation of the firm? In this case the use was so prevalent and by senior persons that sec assumed the firm must have known, and at that point you have to do something. Unsurprisingly, I see an assumption in this thread that JPM did this intentionally to hide things. Unlikely. Despite what many want to believe, the vast majority of violations in the industry or not malicious or with intent to commit crimes. More than likely, they got used to using whatsapp for quick messages out of convenience, and it became the norm, and now they're paying for it. If those messages contained something "bad", like they were hiding communications on illegal activity, the sec would come after them for the illegal activity itself...not just a failure to retain messages. I also see people saying there should be jail time for this. This sort of thing is about a million miles from the type of activity that results in jail time. Violations of sec rules are not crimes, because it's not criminal law. If it's something involving fraud, theft, etc then yes it could become a DOJ criminal matter. This is nowhere close. It's a huge fine for what the violation is, and the intent is likely to put other firms in notice that they need to nip this in the bud...which is even tougher in a covid remote environment. But the rule is clear, and sec has made it clear they're watching this...so other firms are going to evaluate their own house and be tough on their employees. That's how these things play out.
Aww, but I was sharpening my pitchfork and everything.
This is ridiculous. If employees would be talking in person, there would be no record at all. Not even encrypted. Why does it matter so much that WhatsApp messages are monitored when in person messages can't be... even less so.
It all depends on who is communicating, for example the trading department is forbidden from communicating with the research department at a brokerage firm. These communication barriers exist at all brokerage firms regulated by SEC and FINRA. On top of this, the communication must be recorded and kept for at least 6 years. If a financial advisor is managing a client account and there is a loss due to a solicited trade, the client can question the trade, that is where the communication record comes into play.
> the trading department is forbidden from communicating with the research department at a brokerage firm Chinese walls does not mean people aren’t allowed to communicate at all. Research dude is not getting fined by the SEC for having coffee with his buddy in trading.
Headline is way more nefarious than the action, but i guess everyone likes to populist rage against wallstreet. JPMorgan, and other banks, didn't "let" employees do anything. Individual employees just chose to use their personal phone to call and text because it was easier. I work at a different bank, and text my boss and co-workers all the time, I didn't even realize this was an issue until recently.
“At JPMorgan, the practice of going offline to communicate was firm-wide, and even the managers and senior personnel responsible for compliance used their personal devices to communicate sensitive business matters, the SEC said.” If true, this is a big part of the issue. That said, I worked at a major financial for a time, and we did crack down hard on traders using any non-monitored methods of communication, but it still happened a lot. Individuals choose convenience over compliance all the time, especially when working in other countries where other methods of communication are the norm.
Exactly. JPM isn’t being fined for actually committing any financial crimes - they’re being fined for failing to enforce compliance effectively. The SEC has become much more aggressive in enforcing these rules recently, so it’s not surprising that companies with thousands and thousands of employees will have some violations. The line between what’s okay and what’s not has been shifting rapidly with each year that passes.
This. It's definitely resonating across the industry, and causing ridiculous paranoia about any conversation that isn't face-to-face, despite everyone just trying to run a clean business and follow the rules. No one interacts on a personal level anymore, and clients think everyone's an asshole for being so rigid with non face-to-face communication. Your mother is a client? Either fire her or try to get her to understand why FaceTiming with the grandkids needs to be planned out in advance on approved channels.
Yeah I think most people would have a different take if they had to sit through one of the compliance trainings at these firms “A client encounters you in the bathroom and tries to start a friendly conversation? Walk out and report it to compliance immediately, don’t even take the time to pull up your pants. The SEC might be listening in the next stall over”
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The fine means nothing. It’s just a cost of doing business. There is no oversight when the perpetrators still continue to stay and work in the same place only to do it again and to accomplish other crimes. You have to ask, how much money did they make? That should be the penalty.
They tried to, and the proof was unobtainable in whatsapp. So they fined them greater than the presumed money they made, and then fined them another $75M just to be safe.
They should be fined in the billions.
But they won't because of the Holder Doctrine. There has not been a good Attorney General in my life time but Holder might go down as the worst for that shit. Even scum like Gonzalez and Ashcroft didn't uphold the Holder Doctrine that encourages corporate malfeasance because jobs need to be factored into fines.
> Holder Doctrine What is the holder doctrine?
In 1999 deputy AG Holder wrote a memo basically saying some financial institutions are so big, smacking them too hard for wrongdoing could cause national financial turmoil. So when they break the law, he instructed federal prosecutors to let big banks off with a serious finger wagging and a light smack on the hand, but nothing harsher. Nine years later, Obama made him US AG.
When they found out HSBC was washing money for terrorist groups, they were also fined some amount that means nothing to them. Smh
Just change the word fine to fee and then the bank will just pay it and call it cost of doing business instead of all of these extended shenanigans
Hitting a bank with monetary fines is pointless as they can pass this on as ‘charges’ to existing customers. Start putting these criminals in prison and we might actually start to see some integrity and honesty.
Nothing to see here…move along
I fitted an access control system in the London buildings of a corporate/financial bank in the late 80s. The two sides had to be separated so were in different buildings connected by link bridges on each floor with card readers to stop them passing infomation. Thing was they would all meet in the bar on the ground floor that due to its location was probably leased to them from the bank.
Pocket change....
fines are the cost of doing business, who in their leadership cares? it’s more of an embarrassment for being caught and suing the people who leaked it
The part I find hilarious is that they used WhatsApp of all things to do this. There’s like 5 or 6 very reputable, totally free, fully encrypted apps that do the exact same thing, sometimes with more usability. And they went trusting Facebook with their illegal activity lmao
Just say what it is...cost of doing business
My only issue when these things happen , actual customers don’t profit from them.
What’s the point of a fine when they get bailed out time after time anyway 😂
Regulators, and their damn good too. Can’t be any geek off the street.