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SEC WhatsApp crackdown expands to hedge funds

SEC WhatsApp crackdown expands to hedge funds

The Securities and Exchange Commission is widening its probe into Wall Street's use of WhatsApp for conducting business to include major hedge funds, according to Bloomberg.

The SEC has asked several firms, including Point72 Asset Management and Citadel, to look through the phones of some of their employees to find evidence of business dealings carried out on WhatsApp and other unapproved channels.

The SEC has previously asked for details on hedge funds' policies on archiving employee texts and emails, but it is now asking companies to make copies of some phones and review the details.

The move is facing resistance from the sector, with trade groups writing to SEC chair Gary Gensler raising "serious privacy implications," around exposure of health and financial information, says Bloomberg.

Last year, the SEC fined a group of top Wall Street banks a total of more than $1 billion over traders and brokers' use of personal messaging services to discuss investment terms, client meetings and other business.

Morgan Stanley has responded to the crackdown by doling out millions of dollars in fines to its own bankers for conducting business over WhatsApp.

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