US regulators have been on the warpath about WhatsApp and private messages since they discovered that traders and dealmakers were using these “off-channel communications” but their employers weren’t saving them.
When the enforcers complained that this would hamper future investigations and lawsuits, the big investment banks including JPMorgan Chase, Goldman Sachs and Barclays capitulated. Twelve of them have paid out more than $2bn in penalties so far.
The US Securities and Exchange Commission has now turned its attention to private equity and hedge funds. Apollo, KKR and Carlyle have all disclosed they are under investigation and several hedge funds have also been asked to review their employees’ personal phones for evidence that they talked to clients.