Truist will have to pay more than $8 million in penalties for employees sending messages on unapproved platforms like WhatsApp . But federal regulators are giving the Charlotte-based bank a fee reduction for being upfront about its violations.
The bank was among more than 20 financial institutions, investment advisers and broker-dealers that agreed to pay more than $470 million to the Securities and Exchange Commission and the Commodity Future Trading Commission for communication violations.
Truist is paying $5.5 million to the SEC and $3 million to the commodity commission for recordkeeping and supervision violations related to use of unapproved communications methods for broker and investment work.
Since 2019, Truist set policies to prohibit employees from using unapproved communication methods such as personal text messages and social applications for certain business activities.
Messages sent through Truist-approved methods were reviewed and archived. But messages sent by other apps, such as WhatsApp, were not, according to a CFTC news release.
After reviewing public commodity commission orders made by its representatives, Truist conducted an internal survey of senior employees, found violations and self-reported the issues.
The CFTC commended Truist for self-reporting, cooperating with the investigation and setting itself apart from other banks the agency brought action against, according to the CFTC.
“Trusit made the decision to self-report to the Division of Enforcement it had serious recordkeeping and supervisory failures,” said Director of Enforcement Ian McGinley. “It is the only registrant to do so.”
This led to the reduced penalty because of Truist’s willingness to be held accountable, he said.
“Recordkeeping and supervision requirements are fundamental, and registrants that fail to comply with these core obligations do so at their own peril,” McGinley added.
Other banks had to pay a lot more. TD Bank and its associated businesses had the largest fines, with a total of $128.5 million. Edward D. Jones & Co., Ameriprise Financial Services, LPL Financial and Raymond James & Associates, Inc. agreed to pay $50 million each, according to the SEC.
Truist did not respond to a request for comment from The Charlotte Observer Friday.
About Truist
The company was formed in 2019 with the merger of BB&T and SunTrust Banks.
Truist is headquartered at 214 N. Tryon St. More than 3,000 workers are in the Charlotte area. Around 40,000 people are employed comapny wide.
In July, Truist announced job cuts in its technology department but did not disclose how many people would be laid off. Along with cuts to branches, the bank said it was making ‘sizable layoffs’ last year as part of a $750 million cost-cutting plan.
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