Regulatory Wrap Episode 9: Navigating Compliance Across Messaging Channels

In Regulatory Wrap for the week to October 13, we reflect on a recently issued SEC fine against a former industry analyst for insider dealing on Xbox audio.

13 October 2023 2 mins read
by Kathryn Fallah

In Regulatory Wrap for the week of October 13, 2023:

In this Regulatory Wrap, we discuss a recent Securities and Exchange Commission (SEC) enforcement action in which an individual was fined for off-channel communication on Xbox audio chat, a particularly surprising platform. As demonstrated by this instance, regulators are resolute in scrutinizing firms’ proactivity related to communications compliance.

Highlights:

1. Over the past couple of years, regulators have been steadfast in fining firms who fail to monitor off-channel comms on platforms like WhatsApp

2. This is an unusual case that identified Xbox audio chat as the method used to spread non-material public information

3. The insider dealing resulted in over $400,000 of illicit gains – per Microsoft’s Terms of Service, Xbox chats may be recorded where inappropriate behavior is observed

4. In June 2023, the FCA warned industry players that there is “nowhere to hide” from scrutiny, and this insider dealing fine proves the regulator’s sentiment

5. Communication teams should take the growing number of messaging channels as a sign to implement future-focused, scalable capture solutions

This Regulatory Wrap is brought to you by Global Relay’s Director of Regulatory Intelligence, Rob Mason.

Global Relay has a suite of compliance tools to help you meet recordkeeping requirements and mitigate the risk of being next on regulators’ radar.