Morgan Stanley imposes fines on employees for using messaging platforms such as WhatsApp: Report

As per a media report, Morgan Stanley has imposed fines on its employees who used messaging platforms such as WhatsApp for company business, said people familiar with the situation.

The penalties varied from several thousand dollars for some staff to more than $1 million for others. The determining factors for the amounts fined were the number of messages sent, seniority and whether the employees had already received warnings, according to one source familiar with the matter.

The move comes after the lender had agreed to pay $200 million to the U.S. Securities and Exchange Commission in 2021 to resolve probes into employee communications on messaging platforms that had not been approved by the company.

The se-regulatory body of Wall Street, the Financial Industry Regulatory Authority, needs broker-dealers to keep records of all business-related communications. The SEC is keeping a check on whether lenders have been keeping a track of employees' digital communications.

In September, the SEC fined 16 financial firms, including major global banks, a combined $1.8 billion after staff discussed deals and trades on their personal devices and apps. The probe has since expanded beyond broker-dealers to investment funds and advisers, according to four people familiar with the inquiry, Reuters reported in October.

Some banks that were fined have told employees that future pay and bonuses will be docked for those who are found to have used unauthorized communication channels, said a source familiar with the situation.

Employee’s phones and personal computers are also sourced by financial firms to demonstrate to regulators that they are punishing breaches of communications policies, the source said.

In 2020, two senior Morgan Stanley executives left the bank after unauthorized use of WhatsApp to discuss work matters.