Eleven financial firms were recently fined for practices related to app-based messaging use. Orrick’s Jay Williams, Wendy Curtis, and Jeffrey McKenna provide companies a framework for minimizing risk when using these apps.
App-based messaging is here to stay. These tools cost little or nothing, connect us with a few taps on the phone, and appeal to the digital warrior and remote worker in each of us. At home—and at work—people communicate on platforms such as Slack, Microsoft Teams, Google Chat, and iMessage.
Although these platforms play a vital role in our lives, the very features that make messaging apps so popular also create potential risks for companies whose employees use them to communicate business information.
The Securities and Exchange Commission and the Commodities Futures Trading Commission recently fined 11 financial firms a total of $549 million for practices related to app-based messaging use, including by senior executives.
The SEC cited “widespread and longstanding failures by the firms and their employees to maintain and preserve electronic communications.” The CFTC said each of four companies it investigated “failed to stop its employees, including those at senior levels, from communicating both internally and externally using unapproved communication methods, including messages sent via personal text or WhatsApp.”
How can you make sure your colleagues communicate effectively while meeting regulatory and legal obligations? Consider the five tips below.
App-based messaging services can increase connectivity and employee engagement. They’re not going away anytime soon. The key to reducing risk is to ensure people use them at work in a way that aligns with regulatory and legal obligations.
This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.
Jay Williams is an Orrick partner in the firm’s financial and fintech advisory practice.
Wendy Butler Curtis is Orrick’s chief innovation officer.
Jeffrey McKenna is senior e-discovery and privacy attorney at Orrick.
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