The UK FCA fines ex-Jefferies banker for sharing confidential information, as IM issues continue to attract regulatory attention.
The Orwellian approach to the use of instant messaging at financial services companies is gaining foothold, with issues about sharing information at the workplace resurfacing more often nowadays. Another example has just been presented to us by the UK Financial Conduct Authority (FCA) – today, the regulator announced that it had fined an ex-investment banker for sharing confidential information.
The FCA found that Christopher Niehaus, an ex-managing director in the Investment Banking division at Jefferies International Limited, received client confidential information while he was employed by the bank. Several times, between 24 January and 16 May 2016, he shared that information with a personal acquaintance and a friend, who was also a client of the firm. In one of the occasions, the information was about a competitor.
Mr Niehaus used the instant messaging application WhatsApp to share this information, thus raising a sensitive matter for the financial services industry nowadays – that of the use of IM apps at the workplace.
Investment banks and dealing desks have taken measures to tighten the oversight of the use of IM apps and some have entirely banned their use at the workplace altogether following FX manipulation investigations and lawsuits over the past couple of years. In many of the cases, traders have colluded with the help of IM services.
Regarding the case with Mr Niehaus, the FCA notes that neither he nor the individuals he shared the information with dealt in any securities relating to the disclosures. He claimed he wanted to impress the people whom he shared the information with. The information he shared included the identity of the client, the details relating to the client mandate and the fee Jefferies would charge for their involvement in the transaction.
Mr Niehaus resigned from Jefferies before the completion of a disciplinary process.
The penalty for Mr Niehaus is £37,198, as he managed to settle during the stage 1 settlement period and to provide full admissions to the FCA in an early interview. Without the 15% discount he got, the penalty would have been £53,140.#Christopher Niehaus, #investment banking, #Jefferies International Limited, #UK Financial Conduct Authority (FCA), #WhatsApp