OFGEM has fined US banking giant Morgan Stanley £5.41 million for failing to record and retain traders’ WhatsApp discussions about energy market transactions.
The energy regulator said the communications were made between January 2018 and March 2020 by wholesale energy traders via private phones.
It is the first ever fine issued in Britain under legal requirements to record and retain electronic communications related to wholesale energy product trades.
They are aimed at ensuring market transparency by sanctioning against market manipulation and insider trading.
Orgem regulatory director of enforcement and emerging issues Cathryn Scott said: “It is unacceptable that Morgan Stanley 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.”
End Fuel Poverty Coalition co-ordinator Simon Francis said action on this particular case “should remind us about wider concerns about the role of energy market trading.
“Every act of trading energy on the markets usually results in profit for the traders and ultimately adds to our bills.
“Units of energy can be traded several times before reaching our energy suppliers.
“We need to continue to ensure we have as much transparency as possible about all the firms who contribute to Britain’s broken energy system.”
Ofgem said it found that Morgan Stanley had policies in place which prohibited the use of WhatsApp for trading communications – but it did not take sufficient reasonable steps to ensure compliance with its own policies and regulatory requirements.
Morgan Stanley has admitted the breaches and received a 30 per cent penalty discount for agreeing to settle the case.
Source: morningstaronline.co.uk
OFGEM has fined US banking giant Morgan Stanley £5.41 million for failing to record and retain traders’ WhatsApp discussions about energy market transactions.
The energy regulator said the communications were made between January 2018 and March 2020 by wholesale energy traders via private phones.
It is the first ever fine issued in Britain under legal requirements to record and retain electronic communications related to wholesale energy product trades.
They are aimed at ensuring market transparency by sanctioning against market manipulation and insider trading.
Orgem regulatory director of enforcement and emerging issues Cathryn Scott said: “It is unacceptable that Morgan Stanley 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.”
End Fuel Poverty Coalition co-ordinator Simon Francis said action on this particular case “should remind us about wider concerns about the role of energy market trading.
“Every act of trading energy on the markets usually results in profit for the traders and ultimately adds to our bills.
“Units of energy can be traded several times before reaching our energy suppliers.
“We need to continue to ensure we have as much transparency as possible about all the firms who contribute to Britain’s broken energy system.”
Ofgem said it found that Morgan Stanley had policies in place which prohibited the use of WhatsApp for trading communications – but it did not take sufficient reasonable steps to ensure compliance with its own policies and regulatory requirements.
Morgan Stanley has admitted the breaches and received a 30 per cent penalty discount for agreeing to settle the case.
Source: morningstaronline.co.uk
