Skip to main content

In the realm of things a bank can do wrong, failure to keep an eye on what employees are saying/texting/typing on their personal devices has always been a relatively trifling matter. Why, just a year ago, the always tough-minded Financial Industry Regulatory Authority wrung a whole $2.5 million and no admission  of wrongdoing for such slip-ups from Deutsche Bank. You know, boys will be boys, it’s a pandemic, etc.

Unsurprisingly, Gary Gensler & co. are taking it a bit more seriously.

JPMorgan Chase & Co. is nearing a deal to pay a $200 million fine and admit that it failed to properly monitor employees’ messages, the first settlement to emerge from a regulatory sweep into how banks oversee traders’ chats…. In recent months, regulators have questioned a number of big banks, including Bank of America Corp., Citigroup Inc., Morgan Stanley and Credit Suisse Group AG , about how they track employee communications, some of the people said. The status of that regulatory effort, and whether other entities would face fines, couldn’t be determined…..

The SEC deal would be the first to involve an admission of misconduct since agency officials said in October that they would deviate from “no admit, no deny” settlements in some cases…. A $200 million fine is large for a record-keeping violation. Such investigations are often conducted by the Financial Industry Regulatory Authority, a self-regulatory organization overseen by the SEC, according to securities lawyers.

Indeed, as far as the SEC is concerned, not monitoring traders texting on their iPhones is nearly as serious as not monitoring potential money-laundering.

A NatWest Group PLC subsidiary was fined £264.7 million, equivalent to $351.3 million, in a London court over anti-money-laundering offenses for its failure to follow-up on red flags associated with the cash deposits of a customer.

In fairness, though, keeping tabs on those kinds of things are just as hard as keeping tabs on what people do on their own laptops, right?

Beginning in late 2013, the bank’s branches began receiving millions in cash from [gold dealer] Fowler Oldfield, in sums so large, for instance, that they would break the black garbage bags in which they arrived and wouldn’t fit in the bank’s safes.

Often, the cash was in Scottish bank notes—unusual for a business based so far from the border between Scotland and England, according to the court—and carried a noticeably musty smell—indicating that the notes had sat in storage instead of being put to business use.

What’s not so serious, as it turns out, is helping Frenchmen evade French taxes.

The court upheld the guilty verdict against the Swiss banking giant, in a case tried under French criminal law. However, it slashed an earlier fine of 3.7 billion euros, equivalent to around $4.2 billion, to 3.75 million euros, all but eliminating the largest chunk of penalties. It ruled that UBS must still pay 800 million euros in damages and interest, and ordered the confiscation of 1 billion euros.

JPMorgan in Talks to Pay $200 Million Fine Over Employee Text Messages [WSJ]
NatWest Fined $351 Million for Overlooking Money-Laundering Risks Posed By Client [WSJ]
UBS Penalties Slashed by Around $3 Billion in French Tax Case [WSJ]

For more of the latest in litigation, regulation, deals and financial services trends, sign up for Finance Docket, a partnership between Breaking Media publications Above the Law and Dealbreaker.


Sewing Gimp Deutsche

Deutsche Bank Settles Money Laundering Case For €15M, Unquantifiable Amount Of Bad Publicity

Christian Sewing involuntarily shudders whenever he hears police sirens now.


Prosecutors Pretty Sure You Can’t Lose Your Banks $10 Billion Legally

Which is bad news for Bill Hwang and the Archegos crew.

frankfurt police

It’s JPMorgan’s Turn To Play Host To The Frankfurt Police

Let’s have ein Kaffee and talk Cum-Ex, Jamie.