SEC, CFTC, And DOJ Crack Down On Unapproved Messaging Apps

A recent wave of enforcement actions against leading regulated financial institutions related to the use of unapproved messaging applications provides an important message from the Securities and Exchange Commission ("SEC") and the Commodity Futures Trading Commission ("CFTC"). Moreover, the Department of Justice ("DOJ") recently issued a memorandum indicating that (among other things) the use of such applications by any companies—not just regulated institutions—could be problematic in the context of criminal investigations.

Collectively, the SEC and CFTC's enforcement actions levied $1.8 billion of civil monetary penalties against 16 financial institutions for not prohibiting, and in some cases knowingly allowing, the use of messaging applications for business purposes that did not comply with the recordkeeping obligations applicable to those institutions. All companies—whether regulated or not—should therefore ensure that they are able to preserve communications