Goldman probed by SEC over messages sent using unapproved services

In December, the SEC and CFTC imposed $200 million in fines on JPMorgan Chase over messaging apps.

Goldman Sachs Group Inc. became the latest bank to be investigated over employee communications over unapproved messaging services.

New York-based Goldman is cooperating with the Securities and Exchange Commission and producing documents related to a probe into “compliance with records preservation requirements relating to business communications sent over electronic messaging channels that have not been approved by the firm,” it said in a regulatory filing Friday.

In December, the SEC and Commodity Futures Trading Commission imposed $200 million in fines on JPMorgan Chase & Co., saying that even managing directors and other senior supervisors at the bank had skirted regulatory scrutiny by using services such as WhatsApp or personal email addresses for work-related communication. This week, HSBC Holdings Plc said it’s being investigated by the CFTC over bankers’ misuse of WhatsApp and other messaging platforms.

In its filing, Goldman pointed to the probes elsewhere. “The SEC has stated that it is conducting similar investigations of record preservation practices at other financial institutions,” the bank said.

Wall Street firms have been required for decades to closely monitor and save their employees’ business communications, a task that’s been complicated in recent years by the proliferation of mobile technology and messaging apps. The system was strained even more as banks sent workers home at the start of the Covid-19 pandemic, making it harder to see who might be using an unmonitored device.

In the JPMorgan case, SEC officials said they were aware of tens of thousands of messages involving more than 100 people that avoided routine surveillance. The communications that investigators were aware of involved discussions of company business, client meetings, investment strategies and market analysis and color.

The probe was ongoing and would entail other firms, officials said in December, adding that they were encouraging companies to self-report any violations.

HSBC Chief Executive Officer Noel Quinn said the CFTC’s work was part of a broad investigation by U.S. authorities.

“I don’t think it’s specific, I think it’s general across all financial institutions,” he said in a phone interview earlier this week. “They’re looking at the use of mobiles and WhatsApp and text messages to make sure it’s appropriate.”