(Sharecast News) – UK energy regulator Ofgem has fined the US bank Morgan Stanley more than £5.4m after its energy traders used WhatsApp to talk about transactions.
Ofgem said Morgan Stanley had failed to take “reasonable steps” to make sure staff did not use communication methods that it could not hand over to investigators if requested. It emerged that traders who were buying and selling energy used their private WhatsApp accounts to discuss transactions between January 2018 and March 2020.
WhatsApp messages are encrypted at both ends, meaning they cannot be read. It is the first fine handed out in the UK under the regulation on wholesale energy market integrity and transparency (Remit) rules, Ofgem said.
Ofgem found that, while Morgan Stanley International (MSIP) had policies in place which banned traders from using WhatsApp, it “did not take sufficient reasonable steps to ensure compliance with its own policies and the requirements of the regulations”.
The watchdog said it would have fined the company £7.7m, but it discounted the figure by 30% after Morgan Stanley chose to co-operate and settle the matter.
Reporting by Frank Prenesti for Sharecast.com