BOA has $200 million set aside for enforcement of bankers' personal device use

In preparation for an enforcement action related to the unauthorized use of personal devices, Bank of America has set aside $200 million.

During the bank's second-quarter earnings call on Monday, Chief Financial Officer Alastair Borthwick stated that the issue is related to "the use of unapproved personal devices, and that has not yet been fully resolved."


During the pandemic, when many employees worked from home, U.S. regulators, specifically the Securities and Exchange Commission (SEC), have increased their scrutiny of bankers' electronic communications, including emails, text messages, messaging apps, and more. All work-related electronic communications made by bank employees are to be tracked by the company, collected, and stored, and made available for review by the compliance team and, if necessary, regulators.

Regulators have taken action against banks for failing to keep track of all employee electronic communications.


The SEC and Commodity Futures Trading Commission fined JPMorgan Chase a combined $200 million in December for failing to keep track of communications regarding business-related securities, commodities, and swaps made on bank employees' personal devices. The regulators came to the conclusion that the practice persisted for a number of years and was common among all ranks of employees, including senior employees.


Banks are being more proactive in this area in response to the increased scrutiny in order to avoid being the subject of an enforcement action.


According to a report on the investor news website PublicWire, Deutsche Bank has started installing an application on bankers' phones to monitor all of their communications with clients. According to the story, the Movius app enables compliance staff to keep an eye on calls, texts, and WhatsApp chats. According to PublicWire, banks and financial institutions like JPMorgan Chase, UBS, Julius Baer, Jefferies, and Cantor Fitzgerald have all used the app.


According to a Financial Times report, Credit Suisse fired a senior investment banker this year for communicating with clients through unauthorized channels. Despite the banker reportedly not having shared anything objectionable in those unauthorized messages, Credit Suisse nonetheless took action.


Borthwick also mentioned the $225 million in fines levied against Bank of America by the Office of the Comptroller of the Currency and the Consumer Financial Protection Bureau last week in connection with the bank's allegedly overzealous fraud prevention program that purportedly frozen prepaid unemployment benefit cards in 12 states during the pandemic despite the absence of any proof of fraud.

By fLEXI tEAM