Investment advisers and other financial services companies are by now well-aware of the SEC’s and CFTC’s focus on appropriate recording and retention of electronic communications relevant to their business operations. A recent proceeding brought by the U.K.’s Office of Gas and Electricity Markets (Ofgem) is an important reminder that firms must also be cognizant of the requirements of other jurisdictions and regulators. Ofgem determined that Morgan Stanley & Co. International plc (MSIP) had violated recordkeeping regulations applicable to trading in the energy markets by failing to record and retain employees’ WhatsApp messages. To resolve the matter, MSIP agreed to pay a penalty of £5.41 million. This settlement is the first time a fine has been issued in the U.K. for failure to record and retain electronic communications relating to trading in wholesale energy products. This article details the relevant regulatory regime and MSIP’s violations. See “Messaging Apps Come Under Increasing Regulatory Scrutiny
” (Aug. 31, 2023); and “SEC and CFTC Continue to Penalize Firms for Electronic Communications Recordkeeping Violations
” (Aug. 17, 2023).