Watchdog fines City banker for sharing client info over WhatsApp

A City banker at US firm Jefferies International was fined by the City watchdog on Thursday for sharing confidential client information over WhatsApp.

Christopher Niehaus, who was a managing director in the investment banking division at Jefferies in London, shared information he had gleaned from clients with one friend and another acquaintance.

The Financial Conduct Authority said Niehaus had between January and May last year shared details about a company that was a competitor of his friend.

"The information was shared by Mr Niehaus because he wanted to impress the people that he shared the information with," the FCA said, with one boast about "how he may be able to pay off his mortgage if one of the deals was successful".

South African Niehaus, was suspended from Jefferies pending the completion of its disciplinary process and has since resigned, shared not only the identity of his client but also details relating to a "massive mandate".

Details he shares included the fact that a named client might be acquiring part of another company, that another named client that was a competitor of his friend's company was about to complete a rights issue and later that it had issued a profit warning.

Although messages on WhatsApp are securely encrypted, the South African provided the regulator with a full admission and was therefore given a 15% reduction to the £53,140 financial penalty, so he will only pay £37,198.

The fee could have been higher but the FCA did not identify any financial benefit directly derived by Niehaus from the breach, with neither him nor his friend having personally dealt in any shares of the client companies in question.

Niehaus joined Jefferies from UBS, where he was head of industrials investment banking.

The WhatsApp app, which is owned by Facebook, is one of the most-downloaded applications on both iOS and Android software, due in part to the guaranteed privacy from its end-to-end encryption.

UK Home Secretary Amber Rudd last week demanded that encryption be removed from social media messages after the Westminster attack.