The United States is conducting the largest ever investigation into the transmission of secret information on platforms such as WhatsApp, and the authorities have forced Wall Street to systematically check more than 100 private mobile phones carried by head traders and bankers. According to people familiar with the matter, the securities and Exchange Commission (SEC) has been sending a list of key positions to be checked to banks, and in some cases about 30 people, including the heads of specific investment banking teams or trading departments. People in these positions were ordered to hand over their mobile phones for inspection by lawyers.
The move is intended to assess the prevalence of Wall Street professionals using unauthorized information platforms to chat with each other or customers. Regulators are studying which institutions should be punished for failing to protect business-related information sent through unapproved platforms and the intensity of punishment. Financial institutions, including Goldman Sachs, Morgan Stanley, Citigroup, HSBC Holdings and Credit Suisse, have said they are cooperating with the U.S. authorities in their investigation of messaging applications, but it is unclear whether they are all checking mobile phones.
People familiar with the matter said that the request to access personal equipment is extremely sensitive. Because it may involve years of office gossip and even personal information, the bank is arranging external lawyers to assist in the review, which acts as an intermediary and retains some superficial privacy. Lawyers are instructed to look for business-related information, and this definition may bring some comfort to insiders: a boss who roast to his colleagues may not be regarded as business-related. The boss won't know. In addition, at this stage, regulators generally do not require to know the content of information, but only to know who used illegal information transmission channels and the frequency of use.
Earlier this year, Deutsche Bank warned employees not to delete communication records on WhatsApp. People familiar with the matter revealed this week that the Frankfurt based company had not disclosed the US investigation, but had received a request for information from Bafin, the German financial regulator.
Spokesmen for banks and the SEC declined to comment.