Bank fined £5.4m after energy traders used WhatsApp

Morgan Stanley has been fined £5.41m aft vigor traders discussed concern connected WhatsApp connected their backstage phones.

Ofgem, the vigor regulator, said it breached rules that necessitate firms to grounds messages relating to trading wholesale energy.

It is the archetypal good of its benignant to beryllium issued nether transparency rules aimed astatine protecting consumers against marketplace manipulation and insider trading.

The watchdog said that Morgan Stanley's failures were "unacceptable".

It besides said that the good could person been arsenic overmuch arsenic £7.7m but the slope agreed to settee the lawsuit and received a 30% discount.

Morgan Stanley has declined to comment.

Ofgem said that the concern slope had policies successful spot to prohibit unit to usage WhatsApp for trading communications. But it "did not instrumentality capable tenable steps to guarantee compliance with its ain policies and the requirements of the regulations".

Cathryn Scott, regulatory manager of enforcement and emerging issues astatine Ofgem, said Morgan Stanley's nonaccomplishment to grounds oregon clasp communications betwixt January 2018 and March 2020 risked a "significant compromise of the integrity and transparency of wholesale vigor markets".

Under ineligible requirements, Ofgem requires firms to grounds and clasp physics communications relating to trading wholesale vigor products to guarantee transparency and discourage marketplace manipulation and insider trading.

Insider trading is the buying and selling of a listed company's shares oregon different securities, specified arsenic bonds oregon stock options, based connected accusation that is not disposable to the public.

In galore countries, including the US and UK, insider trading is amerciable arsenic it is seen arsenic giving an unfair vantage to those with entree to the information.

The regulator said connected Wednesday it discovered the breach requested accusation from Morgan Stanley, which it said had admitted the failings.

Ofgem said the slope had strengthened its "internal systems and controls" and trained unit to debar aboriginal breaches.