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10 THINGS ON WALL STREET

Hi. I'm Aaron Weinman. Some of the world's largest banks from Goldman Sachs to Morgan Stanley will cough up nearly $2 billion in penalties to the US regulators for failing to sufficiently monitor their employees' use of unauthorized messaging apps.

The financial institutions admitted that their conduct violated recordkeeping provisions outlined in federal securities laws, the Securities and Exchange Commission said in a press release on Tuesday. The SEC hit 11 firms with $1.1 billion in penalties.

At the heart of the matter here are bankers' use of communications platforms like Whatsapp or Signal. These are encrypted messaging apps that bankers regularly use to communicate with clients and even journalists.

The Commodity Futures Trading Commission also ordered 11 firms to pay over $710 million in penalties.

Let's get into it.


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whatsapp 4x3

1. The SEC and CFTC have piled billions of dollars in misery on Wall Street. The largest US banks, boutiques, and European lenders were caught up in a probe around the use of unauthorized messaging apps.

Banks are required to monitor their employees' communications in order to mitigate improper conduct. Bankers have increasingly turned to unauthorized apps to communicate with clients.

Whatsapp, for example, is a popular messaging app with bankers dealing with clients based outside the US. The crackdown has resulted in many bankers having to hand over their phones to their employers for inspection in recent months.

These penalties come after regulators found that banks failed to stop their employees from communicating internally and externally via unauthorized apps.

The SEC has said, however, that banks have begun efforts to improve their compliance policies and procedures around the use of unauthorized apps.

Bank of America, for example, has rolled out a new communications policy to traders and bankers, Insider's Alex Morrell reported. 

Employees said the rules are excessive and hinder personal friendships in the industry.

Check out the full story here.


In other news:

Tyrone Blackburn launched his law practice soon after leaving Morgan Stanley.

2. An ex-Morgan Stanley employee has been representing staff who have bias claims against the bank. Tyrone Blackburn worked in Morgan Stanley's legal department before launching his own practice in 2019. His latest client has also accused the bank's global head of macro strategy of making "racist rants."

3. AllianceBernstein's Chief Executive Seth Bernstein is leaning into private assets and exchange-traded funds. The asset manager's recent private markets purchase is now the largest part of AB's alternatives platform, Bernstein told Insider.

4. Cathie Wood's ARK launched a venture fund that is open to individual investors, The Wall Street Journal reported. The fund is set to invest in private and public firms, similar to those held by ARK's high-growth, tech-focused ETFs.

5. Thoma Bravo will pause future investments in other cryptocurrency companies, the firm's founder Orlando Bravo said in an interview with the Financial Times. Billionaire Bravo also said he was disappointed to find that ethical standards in parts of the crypto space are not as high as in private equity.

6. A Citadel Securities employee left the market maker for a startup, but he now faces a lawsuit. Vincent Prieur faces a non-compete lawsuit after he joined crypto-trading platform Portofino Technologies.

7. Pay data has revealed how much Hollywood giants recently offered for jobs in various divisions. Here are the latest from Disney and Hulu.

8. Ally vs. Marcus vs. Wealthfront. Here is how three of the most popular high-yield savings accounts stack up against each other. Wealthfront, meanwhile, offers a high-yield account with a minimum deposit of just $1.

9. Emergency savings account startup SecureSave has partnered with the San Antonio Spurs and Truist to complete a seed-funding round. Here is the 20-slide pitch deck the firm used to net the capital.

10. Citadel Chief Executive Ken Griffin's splash on a Miami property is a market-defining moment for Florida real estate. The Miami area saw its first $100 million residential-real-estate sale in September. Homes are still in short supply and it's keeping pressure on luxury and non-luxury home prices.


People moves:

  • RBC has appointed Jason Gurandiano its head of US technology banking. He joined the bank in 2015 and was most recently global head of fintech and is a representative on RBC's Crypto Committee, according to a memo seen by Insider. Previously, Gurandiano was head of fintech at Deutsche Bank.
  • Bank of Montreal has hired Bo Brown as a managing director in its capital-markets business, Bloomberg reported. Brown previously worked for Citi, where he handled sell-side M&A transactions for financial sponsors.
  • Jens Welter is quitting Credit Suisse less than a year after being named its co-head of global banking. After 27 years with the bank, Welter is joining Citi as its new co-head of European investment banking. He will also chair Citi's consumer and retail advisory business.

Curated by Aaron Weinman in New York. Tips? Email aweinman@insider.com or tweet @aaronw11. Edited by Hallam Bullock (tweet @hallam_bullock) in London.

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