Bank of America (BAC.N) has set aside around $200 million for a regulatory matter connected to the unauthorized use of personal phones, its chief financial officer Alastair Borthwick said on Monday, adding that he expects the matter to be settled soon.
Last year, Reuters reported that the U.S. Securities and Exchange Commission (SEC) was looking into whether Wall Street banks have been adequately documenting employees’ work-related communications, such as text messages and emails, during the work-from-home period of the pandemic.
The remainder, roughly $200 million, is earmarked for other probes into how the bank kept track of employee communications on their personal devices, like cell phones, Borthwick said.
“The balance of the expense relates to an industry-wide issue and it concerns the use of unapproved personal devices,” he said on a call with reporters. “We hope to finalize that in the coming weeks,” he said.
During its second-quarter earnings on Monday, Bank of America recorded $425 million in expenses to address regulatory matters, $225 million of which related to federal regulatory fines issued last week over the bank’s handling of pandemic jobless benefits, Borthwick said.
In December, the SEC and the Commodity Futures Trading Commission fined J.P. Morgan Securities $200 million for “widespread” failures to preserve staff communications on personal mobile devices, messaging apps and emails.
Other major investment banks including Morgan Stanley (MS.N) and Citigroup (C.N) have also put aside cash to cover similar expected fines, the banks have said.
Regulators require banks to keep records of all business-related communications and as a result financial firms typically ban the use of personal email, texts and other social media channels for work purposes, although bankers do not always comply with those rules.
The SEC’s head of enforcement has said banks’ failure to fully record all staff communications has hampered its probes into other, unrelated issues.