SEC Probes Major Equity Funds Over Employees’ Use of Personal Electronic Communications

US regulators are probing major Wall Street firms over how they track employees’ digital communications while on the clock.

Numerous investment firms have received letters from the SEC requesting information into their use of personal electronic devices and messaging platforms to conduct business. Since the beginning of the pandemic, investment companies’ use of instant messaging apps such as WhatsApp, Telegram, and Signal became prevalent to accommodate employees’ work-from-home schedules; however, a number of major banking institutions, including JPMorgan Chase & Co and Goldman Sachs, among others, have paid major penalties over the past year after the SEC determined they weren’t following record retention requirements.

The latest to join the SEC’s growing inquiry list are private equity firms Apollo Global Management Inc. and Carlyle Group Inc., with the latter company on Wednesday revealing via regulatory filings they received letters from the SEC “related to the preservation of certain types of electronic business communications,” such as “text messages and messages on WhatsApp, WeChat, and similar applications.”

Investment giants and money managers typically have to maintain records of investment advice, but given the nature of most messaging apps’ functions of instantly deleting messages, investment advisors’ and their employees’ use of such digital communications could lead to potential SEC violations.

Information for this briefing was found via Reuters and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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