Ex-Jeffries Banker Fined for ‘Boasting’ WhatsApp Messages

By April 28, 2017blog
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While the service provided by WhatsApp is free of charge, one British user was caught sending some particularly costly messages. Christopher Niehaus, former managing director in the Investment Banking division at the global investment banking firm Jeffries, has been fined £37,000 ($46,000) for sharing confidential information via the popular messaging app.

According to the Financial Conduct Authority (FCA), the UK regulator that issued the fine late last month, Niehaus shared confidential client information in a series of WhatsApp messages between January and May of 2016. The information was shared with both a personal acquaintance and a friend, who was also a client of the firm.

Among the information shared in his messages, Niehaus transmitted the identity of a client, details relating to the client mandate, and the fees that the firm would charge for their involvement in the transaction.

In one of the instances, Niehaus shared with his friend, a client of the firm, information about a competitor. He also boasted that he may be able to pay off his mortgage if a particular deal was successful, according to the FCA statement.

The reason given by Niehaus to the FCA as to why he shared the information was simply because he wanted to impress the people with whom he had shared the information.

Niehaus resigned while on suspension from Jeffries, pending the completion of the company’s disciplinary process. The FCA reduced his financial penalty from £53,140 ($68,000) as a result of Niehaus’ cooperation and agreement to settle at an early stage in the settlement period.

The reason for the fine, according to the FCA, was that Niehaus “failed to act with due skill, care and diligence” even though there was “little risk of loss to consumers, investors or other market users.” There was no suspicion that Niehaus was trying to make a profit as a result of these messages.

This is the first time WhatsApp, founded in 2009, has been flagged in an FCA fine but it’s likely it won’t be the last. Use of mobile devices is a growing trend in the workplace and as more users use their own devices to access work and send legitimate work-related messages, the lines between work and personal use can get blurred.

Furthermore, while there will always be those who enjoy “talking shop” with friends and impressing them with upcoming bonus figures, when these conversations shift from barbeque banter to messaging apps, the risk of leaks, hackers, and phone theft greatly increases the risk to the firm.

Work places, and particularly industries where employees are privy to sensitive client information, should be implementing clear policies for appropriate and secure mobile activity. Secure messaging apps with text message archiving capabilities for all work-related messages will reinforce to employees the need to treat work-product and client information with the utmost of care and confidentiality.

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