SEC’s Crackdown On WhatsApp Now Includes Hedge Funds

SEC is expanding its investigation into Wall Street’s use of WhatsApp for business to include significant hedge funds.

The SEC has asked Point72 Asset Management and Citadel, among other companies, to look through the phones of some of their employees to see if there is evidence of business being done on WhatsApp and other unapproved channels.

The SEC has already questioned hedge funds how they preserve employee texts and emails. But now it wants businesses to copy select phones and look at their data.

The move is getting a lot of pushback from the sector. Trade organizations have warned SEC head Gary Gensler of the severe privacy risks of releasing health and financial data.

Last year, the SEC penalized a group of prominent Wall Street firms over $1 billion for traders and brokers using personal messaging platforms to negotiate investment terms, client meetings, and other business.

In response to the crackdown, Morgan Stanley has fined its bankers millions of dollars for doing business over WhatsApp.