SEC Probes Wall Street Firms’ Use of Private Messaging Apps

  • The U.S. Securities and Exchange Commission (SEC) is expanding its investigation into how Wall Street firms use private messaging platforms like WhatsApp and Signal, having collected thousands of messages from more than a dozen investment companies.
  • Major investment firms like Carlyle Group, Apollo Global Management, KKR & Co., TPG, Blackstone, and hedge fund companies including Citadel are among those under investigation. Employees and executives, who handed over their messages to SEC, are included in this probe.
  • This investigation has escalated from previous broker-dealer investigations where the SEC only reviewed a sample of messages. This scrutiny underlines an ongoing issue of Wall Street firms using private messaging services which are not monitored by employers, putting them at risk of non-compliance with recordkeeping rules.
  • Previously, SEC charged 11 Wall Street firms for “widespread recordkeeping failures” related to unauthorized messaging platform use, resulting in penalties of $289 million. Additional fines related to recordkeeping and supervision failures have totaled more than $2 billion thus far.