HSBC and Scotia hit with fines over WhatsApp use

As the banking crisis continues in the United States, financial regulators continue to scrutinize traditional giants such as HSBC and Scotiabank.

The Securities and Exchange Commission (SEC) has fined HSBC Securities (HSI), the securities arm of HSBC, and Scotia Capital, an investment subsidiary of Scotiabank, for record keeping violations.

HSI agreed to pay $15 million to settle with the SEC, and Scotia Capital agreed to pay $7.5 million. In addition, Scotia paid $15 million to settle the U.S. Commodity Futures Trading Commission’s claims.

The US SEC announced this news on May 11. Said The bank has failed to meet record-keeping requirements for dealers registered with US market regulators.

Authorities learned that HSBC and Scotiabank employees, including executives, were using unauthorized communication channels such as text messages and WhatsApp. SEC I have written:

“Managing directors and senior supervisors with oversight responsibilities for junior employees may themselves fail to comply with company policies, such as communicating about company broker-dealer operations on personal devices using methods not approved by the company. I didn’t.”

According to the regulator, HSI’s failure to put in place a policy prohibiting such communications precluded reasonable oversight of its employees under Section 15(b)(4)(E) of the Securities Exchange Act. It means that

“Both companies failed to maintain or store most of these communications in violation of federal securities laws,” the SEC noted.

connection:UK Banks Denying Crypto Customers: Report

HSBC and Scotiabank are just the latest Wall Street companies to have employees fined for using personal devices and messaging apps.In September 2022, U.S. officials reportedly bagged Such cases could result in fines of around $2 billion, penalizing companies that negotiated deals, deals and personal apps. In 2021, US regulators launched extensive investigations into financial firms’ use of personal messengers like WhatsApp.

Both HSBC and Scotiabank are unlikely to be described as very crypto-friendly banks.

HSBC Holdings joins a growing list of banks to ban credit card purchases of cryptocurrencies for retail customers in March 2023, tightening restrictions on digital assets. In 2021, HSBC Group CEO Noel Quinn wrote an article against cryptocurrencies and stablecoins while supporting central bank digital currencies.

Scotiabank, on the other hand, allow The company is also known for banning trading from cryptocurrency exchanges. Some online users reported having problems withdrawing or depositing Bitcoin (BTC) using their Scotia accounts in July 2022.

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