In a groundbreaking development, global investment banking giant, Morgan Stanley has been fined £5.4millon ($6.9m) by Ofgem regulators. The penalty arose after discovering that the bank’s energy traders engaged in business discussions via WhatsApp on their personal phones. This is a direct breach of the rules stipulating the recording of messages linked to energy trading.
This moment is the first time a financial institution has incurred penalties under Ofgem’s transparency regulations, specifically aimed at safeguarding consumers against potential market manipulation and insider trading, thereby preserving the integrity of energy trading practices.
The fine could have been £ 7.7 million, however, Morgan Stanley chose to settle the case, resulting in a 30% reduction in penalty. This decision reflects the bank’s commitment to addressing the issue and working in tandem with regulators to seek a resolution.
Morgan Stanley’s mishap highlights the challenge many businesses, no matter their size face in ensuring communication practices are aligned with regulations. Despite having comprehensive policies that explicitly prohibit employees from using platforms such as WhatsApp, the bank struggled to prevent the breach. This discrepancy raises questions about the efficacy of internal controls and dedication to upholding communication standards.
From a legal standpoint, financial firms are accountable for recording and retaining digital communications relevant to wholesale energy product trading. This measure is intrinsically tied to enhancing transparency, thwarting marketing manipulation, and eradicating potential insider trading, thereby upholding the fairness and integrity of energy markets.
Morgan Stanley’s fine serves as a warning to the broader financial industry, as well as other businesses. With technology allowing businesses to change the way they work, and communicate, the importance of protecting data is the need of the hour. That’s why at Siccura, we’re on a mission to help businesses keep their data, private, secure, and in their control.
Siccura’s platform offers a comprehensive solution for businesses to keep data of any kind locked and encrypted in an unrecognisable form that can only be accessed by authorised recipients. The platform focuses on ensuring that data, no matter whether it is email content, files stored on the local computer, or anywhere else remains locked, and only accessible through Siccura. With a comprehensive admin panel, businesses can control and manage what type of communications employees can send, and to whom. With 24/7 tracking, business owners are updated with real-time notifications and know exactly who, what and when data was accessed or what activity took place.