Investor lawsuit targets Bank of America over off-channel comms fines

Bank of America

Blowback from the large fines levied against banks and financial services firms for allowing off-channel business communications by their employees continues to reveal itself in varying ways.

The issue gained widespread attention as part of a regulatory crackdown by the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC), who combined to issue $2 billion worth of penalties against a dozen of the world’s largest financial institutions between December 2021 and September 2022.

The regulators said they identified “widespread and longstanding failures” in monitoring, maintaining, and preserving electronic communications by employees at JPMorgan Chase, Goldman Sachs, Citi, Bank of America, Barclays, Credit Suisse, Deutsche Bank, Morgan Stanley, and UBS, among others.

Another round of smaller fines against HSBC and Scotiabank for similar misconduct was announced by the regulators in May.

The latest aftershock from the crackdown has been stockholder lawsuits.

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