BNP Paribas recently warned investors that it faces penalties from the Securities and Exchange Commission and the Commodity Futures Trading Commission in connection with record-keeping violations that have ensnared more than a dozen banks since 2021.
The French bank and its broker-dealer subsidiary have “reached proposed resolutions” to investigations by the U.S. regulators over failure to comply with “records preservation requirements relating to the use of unapproved electronic messaging platforms for business communications,” BNP said in a semiannual report Thursday.
The bank also disclosed it set aside €125 million ($137.4 million) for litigation in the second quarter but declined to say whether that was related to the messaging probes.
BNP Paribas CFO Lars Machenil, however, told Bloomberg on Thursday the provisions related to a matter “not specific to BNP Paribas, not specific to French banks.”
BNP Paribas is hardly the first institution this year to flag regulators’ continuing crackdown on bankers who use unapproved messaging platforms such as WhatsApp and Signal to conduct business. Wells Fargo, BNY Mellon, Fifth Third, Societe Generale and asset manager BlackRock all disclosed investigations — or at least, requests for information — from U.S. agencies in February.
Rumors of a new wave of record-keeping penalties gained more fuel in May, when HSBC and Scotiabank were ordered to pay $45 million and $22.5 million, respectively, to resolve probes into messaging-platform misuse from the SEC and CFTC.
JPMorgan Chase agreed to pay regulators $200 million in December 2021 over similar activity, in the first case of its kind.
The SEC and CFTC followed that up last September by handing out more than $1.8 billion in penalties to 11 Wall Street banks and brokerages in a wider effort to curb finance employees’ use of unapproved messaging platforms and companies’ failures to keep accurate records of those communications.
BNP on Thursday said the proposed resolutions are “subject to finalization by the CFTC and SEC.”
“Like many other financial institutions in the banking, investment, mutual funds and brokerage sectors, the Bank has received or may receive requests for information from, or be subject to investigations by supervisory, governmental or self-regulatory agencies,” BNP Paribas said Thursday. “The Bank responds to such requests and cooperates with the relevant authorities and regulators and seeks to address and remedy any issues that may arise.”
