A major US bank has been fined £5.4m by the UK’s energy regulator for failures to record and retain communications between traders.

Ofgem said that the penalty imposed on Morgan Stanley & Co International plc (MSIP) was the first of its kind and related to discussions over WhatsApp between January 2018 and March 2020.

The communications on energy market transactions, it explained, were made by wholesale traders on privately-owned phones in a breach of rules designed to protect consumers, ensure market transparency and prevent insider trading.

Private chat over WhatsApp is banned for traders due to the platform’s use of encryption. Banks are required to hold on to all communications and hand them to regulators on request.

Be the first to get Breaking News

Install the Sky News app for free

“Ofgem found that MSIP had policies in place which prohibited the use of WhatsApp for trading communications – but MSIP did not take sufficient reasonable steps to ensure compliance with its own policies and the requirements of the regulations,” the watchdog’s statement said.

“MSIP has admitted the breaches… and has taken steps to ensure the breaches do not happen again, including enhanced staff training and the strengthening of its internal systems and controls.

“MSIP fully co-operated with Ofgem’s investigation and has agreed to settle the case. The fine includes a 30% penalty discount for settling.”

House prices fall – but rising cost of borrowing makes buying more expensive

Cost of living – latest: Leading broker not hopeful on falling mortgage rates; Ocado drops price of 200 items

Jaguar Land Rover to reuse its car batteries to store national grid power

Please use Chrome browser for a more accessible video player

Ofgem’s regulatory director of enforcement added that the fine sent a strong message about enforcement of trading regulations.

“It is unacceptable that MSIP failed to prevent electronic communications which could not be recorded or retained.

“It risks a significant compromise of the integrity and transparency of wholesale energy markets.

“We welcome the steps MSIP has taken to ensure the breaches do not happen again.”

The company was yet to comment.

Related posts:

Business confidence hits record high as firms see boost from pent-up demand British cyber security firm Darktrace confirms intention to float on London Stock Exchange Leap in business costs fails to dent ‘resurgent recovery’ in February TUC calls for raise of minimum wage to £15 an hour ‘to put an end to low-pay Britain’ Toyota sports car ad ‘condoned and encouraged unsafe or irresponsible driving’ Do the sums add up after chancellor gives only half the story? | Paul Kelso September financial curse strikes again – and beware of October economic horrors UK has lost credibility among investors and the ‘bond vigilantes’ serve as a warning Netflix declares itself de facto winner of streaming war Forecasts, though routinely wrong, are still worth listening to Cinepolis executive Acuna screened for top Cineworld job Cafe chain enters administration with 250 job losses but one outlet remains open