Morgan Stanley, a New York-based global investment bank, has penalized some of its employees with fines ranging between a few thousand dollars to over $1 million for using messaging platforms such as WhatsApp to discuss official business.

Sources told the Financial Times, which first broke the news that Morgan Stanley used factors such as seniority, the volume of messages sent and if previous warnings were issued to determine the fine each employee was to pay. Additionally, Bloomberg reported that the financial services company has already deducted the fine from some of the workers’ bonuses while others will settle their debt with future pay.

Morgan Stanley’s action comes five months after the top global banker agreed to pay $125 million to the US Securities and Exchange Commission (SEC) and $75 million to the Commodity Futures and Trading Commission (CFTC ) to settle the regulators' probes into its record-keeping practices.

Over two years ago, the banker fired two of its top trading executives for violating the company's policy on communication tools by using WhatsApp to discuss official business.

Last year, other top US bankers, such as the Bank of America, Barclays and Citigroup set up funds to settle related cases.

Regulators such as the SEC requires broker-dealers to preserve their business-related communications for regulatory purposes. However, in the last few years, the securities market regulator has been probing the lenders to determine if they are keeping records of their communications, including those made on social messaging applications.

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The SEC Hits 16 Wall Street Firms with $1.1 Billion Fine in 2022

In a major revelation last year in September, the SEC disclosed that 16 Wall Street companies have agreed to pay combined penalties of over $1.1 billion for their failure in recordkeeping. These companies include 15 broker-dealers that are the subsidiaries of banking giants such as Barclays, Bank of America, Goldman Sachs, Citigroup, Credit Suisse and Deutsche Bank, among others. The group also included one affiliated investment adviser.

According to the SEC, between January 2018 and September 2021, the firms’ employees routinely communicated about confidential business matters using text messaging applications such as WhatsApp on their personal devices. The SEC described this as “pervasive off-channel communciations.”