A number of people working for banks or investing firms are using the apps to have conversations out from under the watchful eye of higher ups and HR personnel, according to a Thursday report from Bloomberg. Those messages could contain anything from inappropriate jokes to confidential information.
However, this practice is illegal, according to the Securities and Exchange Commission. Bloomberg added that existing rules require financial firms to keep records of all communications. In fact, this past Thursday, a former managing director for investment banking firm Jefferies was fined for sharing confidential information about client.
“You’re really able to operate outside of the bank,” William McGovern, a former SEC branch chief and senior lawyer at Morgan Stanley who now works at law firm Kobre & Kim, told Bloomberg. “We have seen in our investigations that the ground is shifting under everyone, and technology changes are driving a lot of it.”