Wall Streeters shuddered as the news broke last year that U.S. regulators were examining whether bank employees were using personal phones to text about business with each other and clients—a rule that just about everyone seemed to be breaking.

Yet for those quietly worrying, there’s a silver lining emerging: It doesn’t appear to be a career killer.

Shortly after being ousted over the scrutiny, a trio of executives from JPMorgan Chase & Co.—the first bank hammered by authorities in the widening probe—landed new jobs in the industry. The firm itself paid $200 million in fines for its surveillance lapses.

Ben Sykes, an executive director who left last year, landed at competitor Jefferies Financial Group Inc. in September, according to records filed with brokerage regulators. Earl Dowling, a former managing director who people familiar with the matter say was also was pushed out, started this month at investment banking boutique PJT Partners Inc.

And that’s after senior credit trader Ed Koo, an early casualty of JPMorgan’s efforts to clamp down on unauthorized texting, landed a new role at a smaller firm in mid-2020, not long after he left JPMorgan. He’s now a portfolio manager at Brean Asset Management.

The landings may provide at least a little comfort to Wall Streeters as the U.S. probe expands to examine whether more firms broke recordkeeping requirements designed to protect investors. When punishing JPMorgan, federal investigators expressed particular ire with managers who were supposed to help head off texting outside official channels, but instead engaged in it themselves. That focus raises the odds that employees at other companies will get pushed out as inquiries proceed.

The new gigs also come as Wall Street leaders have been complaining about how hard it is to attract and retain experienced staff, in what many are calling a “war for talent.” It’s not the worst time to be job hunting.

“These people were able to find alternative employment because presumably they have skills and are good at what they’re able to do,” said Adam Pritchard, a law professor at the University of Michigan. “JPMorgan probably had to fire some people to show that they were serious. So you can see how a subsequent employer would say, ‘Yeah, that’s a regulatory violation, but you weren’t stealing from your customers.’”

The ubiquity of private texting has become something of an open secret at banks in recent years. As mobile messaging apps proliferated, many Wall Streeters took to using them as a quick way to ping a colleague or client—or a discreet way to make offhand comments without bosses seeing. The use of such platforms became all the more common when the Covid-19 pandemic forced legions of employees to work from home in early 2020.

The Securities and Exchange Commission has required securities firms to archive written communications since the 1930s. Last month, it accused JPMorgan of failing to meet its obligations from early 2018 through late 2020 as employees sent messages by text, WhatsApp and personal email accounts. While the agency said that hindered its other inquiries, it stopped short of accusing the firm of using those unauthorized platforms to cheat clients or engage in wrongdoing.

First « 1 2 » Next