The U.S. Securities and Exchange Commission fined some of Wall Street's largest companies a total of $1.8bn after employees discussed deals and trades on their personal devices and apps.

According to regulatory experts, the extensive industry investigation, which was first reported by Reuters last year and has subsequently been acknowledged by other lenders, is a watershed case for the agency.

"The firms admitted the facts...acknowledged that their conduct violated recordkeeping provisions of the federal securities laws... and have begun implementing improvements to their compliance policies and procedures to settle these matters," the SEC said.

Bank of America, Barclays, UBS, Citigroup, Goldman Sachs, Credit Suisse, and Morgan Stanley were among the 16 firms named by regulators.

According to regulators, from January 2018 to September 2021, bank employees often communicated about business matters with colleagues, clients, and other third-party advisers via apps on their personal devices such as text messages and WhatsApp.

The majority of the chats were not preserved, which violated federal requirements requiring broker-dealers and other financial organizations to maintain business correspondence.

According to the agency, this impacted regulators' ability to ensure compliance with essential standards and gather evidence in unrelated investigations.

The "sweep" of the industry shows the difficulties Wall Street banks have in tracking employee communications in the age of the work-from-home pandemic and is another indication that the SEC is stepping up enforcement under its Democratic leadership.

Periodically, the SEC undertakes sweeps to swiftly gather data on problems it suspects may be pervasive. Sweeps occasionally, but not always, result in official probes.

As a result of the probe, some bankers have lost their jobs, shaking up Wall Street. Additionally, it has forced businesses to implement strict new regulations to prevent the illicit usage of apps.

Broker-dealers are required by the SEC and the Financial Industry Regulatory Authority, Wall Street's self-regulatory organization, to preserve records of all business-related interactions. Banks must tread a delicate line between complying with such laws and violating employees' privacy.

In the United States, there is no clear legal basis for an employer to require that workers' personal communications be inspected, but in other countries, doing so may violate data protection regulations.

As a result, many financial institutions prohibit employees from using personal email, SMS, and other social media platforms for professional purposes.

In 2020, Morgan Stanley sacked two top executives for using WhatsApp to discuss work topics without permission.