Billion-Dollar Bank Facing US Government Investigation For Allegedly Dodging Rules on Record Keeping
European lending giant BNP Paribas is currently in talks with US regulators to settle probes over its employees’ use of messaging applications that may have violated rules on record keeping.
According to the bank’s latest earnings report, BNP Paribas Securities Corp, the firm’s US-registered broker-dealer, is being investigated by the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) for possibly breaking record-keeping provisions.
Meanwhile, BNP Paribas itself is also being probed by the CFTC over the same issue.
US regulators are looking at the financial firms to see whether their employees used “unapproved messaging platforms” for business communications, which may result in fines.
The bank says it has reached “proposed resolutions” with the SEC and CFTC to close the investigations but notes that the proposals are still subject to the regulators’ approval.
US regulators have been clamping down on Wall Street over the use of banned messaging apps for electronic communications. Last year, the SEC charged 16 Wall Street firms for “longstanding failures” to maintain and preserve digital communications, leading to fines worth $1.1 billion.
As stated by SEC Chair Gary Gensler,
“Finance, ultimately, depends on trust. By failing to honor their recordkeeping and books-and-records obligations, the market participants we have charged today have failed to maintain that trust. Since the 1930s, such recordkeeping has been vital to preserve market integrity.
As technology changes, it’s even more important that registrants appropriately conduct their communications about business matters within only official channels, and they must maintain and preserve those communications.”
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Author: Henry Kanapi
