HSBC has fired a London-based trader following an investigation into the use of inappropriate messaging applications with clients as banks come under increasing pressure to clamp down on unauthorised communications.
The departure is the latest in a swath of bankers losing their jobs over the way they communicate with clients, following regulatory pressure on banks to police their workers’ personal messaging habits.
The HSBC dismissal, which was first reported by Bloomberg and confirmed by a person familiar with the matter, followed an investigation by the bank’s London compliance team this year into the way staff were using messaging tools such as WhatsApp.
The bank declined to comment or provide details of the foreign exchange trader’s identity.
HSBC’s compliance team discovered messages on the individual’s phone that revealed a broker buying the trader tickets to a sporting event, according to a person with knowledge of the incident.
The US government is investigating record-keeping practices across Wall Street, while the UK’s Financial Conduct Authority has been putting pressure on banks to make sure their staff do not conduct business-related communications through private messaging apps.
Yesterday, the Financial Times revealed a prominent Credit Suisse investment banker had been removed from his role earlier this year after he was found to have used unapproved messaging apps with clients.
Anthony Kontoleon, known as “AK” to colleagues, was Credit Suisse’s global head of equity capital markets syndicate in New York and left his position in April. He is set to depart the bank, where he has worked for 28 years.
HSBC and Credit Suisse have previously disclosed they have been investigated by US regulators over record-keeping.
In December, JPMorgan Chase agreed to pay $200mn in fines to the SEC and the Commodity Futures Trading Commission for failing to keep records of staff communications on personal devices, in an action that spooked many Wall Street banks.
Most banks have policies in place that dictate communication with clients should be conducted through official channels, such as company email or recorded phone lines, which can be monitored by the compliance department.
But bankers often find their clients prefer to communicate on apps on their personal mobiles.
“That has been monitored pretty closely since the FX scandals,” said an executive whose bank had previously been investigated by regulators over colluding to manipulate foreign exchange rates.
“But we struggled with how realistically to enforce this as certain clients love chat channels.”
The use of private communication tools became more common when bankers started working from home during the Covid-19 crisis.
Bankers at companies including JPMorgan and UBS have started to use an app called Movius on their phones, which records all calls and logs text messaging.