RBC's investment banking arm sacks senior exec over communications violations

Regulators have been cracking down on how banks monitor employees communications on unauthorized messaging apps.

The Royal Bank of Canada s investment-banking arm fired John Reed, the head of equity syndicate, over communications that violated the firm's compliance guidelines, according to people with knowledge of the matter.

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An RBC representative declined to comment, while Reed didn't respond immediately to a request for comment.

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Wall Street regulators have imposed fines of more than US $2 billion related to compliance failures, and they have been cracking down on how global financial firms and banks monitor employees communications on unauthorized messaging apps.

Firms are required to watch communications involving their business to make sure they don't get any wrongdo. The system, already challenged by the proliferation of mobile-messaging apps, was strained further when the COVID-19 epidemic forced most Wall Street to work from home.

Reed's ouster follows the departure of Credit Suisse Group AG's most senior equity capital markets syndicate banker earlier this year after he was found to have used unauthorized messaging services when communicating with clients.

Reed, who is based in New York, joined RBC in 2016 after nine years at Deutsche Bank AG.