WhatsApp Messages and SPK Fine: Council of State 2024/2408

An investor trading leveraged products complains to the Capital Markets Board, saying that an instruction given during a twenty-minute technical fault on the platform was not carried out and that a loss resulted. Attached to the complaint petition are WhatsApp messages exchanged with the brokerage firm's customer representatives. The Board establishes that one of the lines used for the messages belongs to the brokerage firm and asks the firm for all its records. These messages are not among the documents sent. The result is an administrative fine of TL 325,617.00 imposed on the brokerage firm. The core of the dispute is this question: are instant messages exchanged between a customer representative and a client over a firm line among the records a brokerage firm must keep?

With its decision of 28 May 2024, Docket No. (E.) 2019/141, Decision No. (K.) 2024/2408, the Council of State (Danıştay) 13th Chamber affirmed, by majority and with finality, the regional administrative court decision that rejected the appeal against the administrative court ruling dismissing the case. One member wrote a detailed dissenting opinion based on the confidentiality of the customer representative's communications.

📱 The technical fault, the complaint and the WhatsApp attachments

According to the text of the decision, the event took place on 29 April 2016 between 15.22 and 15.42. The investor, a client of the brokerage firm, filed a complaint petition with the Board, stating that during this period a technical fault in leveraged trading meant no price feed was available, that the instruction given to the brokerage firm timed out because of the freeze in the system, and that a loss resulted.

Attached to the petition were messages exchanged on the WhatsApp application between the investor and two customer representatives of the brokerage firm. The Board took two steps at this point:

On the basis of these findings, the Board held that the brokerage firm had acted in breach of Article 26, paragraph 1 of Communiqué III-45.1 on Documents and Records for Investment Services, Activities and Ancillary Services, and imposed an administrative fine of TL 325,617.00. The brokerage firm brought a case seeking annulment of the part of the Board's decision relating to this fine. The investor's original complaint, the technical fault and the alleged loss, is not the subject of this case; the dispute is limited to the fine for the record-keeping obligation.

⚖️ Administrative court: the messages are not private

The administrative court dismissed the case. The reasoning of the decision comes down to three points:

1. Content test: The content of the messages does not fall within private correspondence; it concerns the activities the investor carried out through the brokerage firm.
2. Retention obligation: Messages with this content are among the documents that must be kept under Article 26, paragraph 1 of the Communiqué.
3. Purposive interpretation: Exempting WhatsApp messages from the rules in the Communiqué would remove the purposes of the legislation, namely transparency and ease of supervision.

The court therefore gave no weight to the brokerage firm's defence that “WhatsApp messages are private in nature and exempt from the Communiqué”. What was decisive in the reasoning was not the tool used for the communication but what it concerned. Where a message relating to an investment service is exchanged over a firm line and in the capacity of a customer representative, it was treated as part of the record-keeping system whatever the channel.

The regional administrative court stated that the decision under appeal complied with procedure and law and that the claims made did not require it to be set aside, and rejected the appeal under Article 45, paragraph 3 of the Administrative Procedure Law No. 2577.

📝 The brokerage firm's appeal objections

In its appeal petition, the brokerage firm relied on the following objections:

The defendant Board argued that the act and the regional administrative court decision were lawful. The Council of State rapporteur judge also gave the opinion that the appeal request should be rejected and the decision affirmed.

🏛️ The Council of State's affirming decision

The 13th Chamber first rejected the claimant's request for a hearing, not finding it justified under Article 17, paragraph 2 of Law No. 2577. It then recalled that regional administrative court decisions can be reversed only if one of the grounds listed in Article 49 of the same Law exists; it stated that the decision under review complied with procedure and law and that the reasons put forward in the petition were not of a kind to require reversal.

The Chamber thus adopts the administrative court's approach that “if the content relates to an investment service, the message must be kept” without writing a separate reasoning of its own. The objections that the defence was not taken, that personal rights would be violated and that the amount of the fine was disproportionate were also not accepted as grounds for reversal. The decision was given with finality and by majority.

🗳️ Dissent: the contract, orders and the expectation of confidentiality

The part that makes the decision interesting is the long, reasoned dissenting opinion. The member who wrote it argued that the fine was unlawful and that the regional administrative court decision should have been reversed. The reasoning rests on two legs.

First leg: a WhatsApp order should be regulated in the contract

According to the dissent, Article 5 of Communiqué III-45.1 requires investment firms to conclude a contract with clients before starting transactions. Article 8 regulates written and oral orders, voice recordings of orders received by telephone, fax instructions, and IP and log records of orders received electronically, and places the burden of proving an oral order on the investment firm. The dissent states that whether clients may give orders through WhatsApp on the phone numbers set in the contract should be clearly determined in the contract, and that the reliability of these messages is disputable because they can easily be deleted. According to the dissent, where the contract has no such rule, the Board's view that these messages must be recorded forces the brokerage firm to go beyond the contract.

Second leg: the employee's confidentiality of communication

The dissent also refers to the Constitutional Court decision of 28 December 2021, individual application No. 2018/34548, on the monitoring of communications in the workplace. That decision stressed that, where no clear prior information is given about the conditions of use of communication tools, employees have a legitimate expectation that their fundamental rights are protected in the workplace too. According to the dissent, if the customer representative was not told that WhatsApp messages on the phone provided for their use would be recorded and monitored, the Board's forcing the brokerage firm to monitor these messages is contrary to the representative's reasonable expectation of privacy of private life and communication.

The majority did not agree with this view. Although a dissent is not binding, it shows that the debate on the conditions under which instant messaging over a firm line falls within the recording obligation is not yet closed.

🔎 What it means for investors and brokerage firms

The decision speaks directly to a common practice in leveraged trading: messages between the investor and the customer representative that continue on instant messaging applications alongside the official channels. In this case, the administrative court counted messages that carry content relating to investment activity and are sent over a firm line among the records that must be kept; the Council of State affirmed this result.

An important detail for investors is the role played by screenshots in the complaint process. The Board's review began with the messages the investor attached to the petition; the ownership of the line was verified by asking the telecommunications companies. The absence of these messages from the records the brokerage firm itself submitted was the basis of the fine. The investor's claim of loss arising from the technical fault was not addressed in this case; that matter is the subject of a separate legal route.

A similar record-keeping issue is also examined in the decision on the time difference in a telephone orderTR, which concerns the gap between the voice recording and the transaction time for orders given by phone. The decision on cash without a receiptTR, on the failure to document a cash handover at a brokerage firm, shows another side of the record-keeping system. On the employment law side, the decision on a message on a company phoneTR, which assesses termination of employment based on messaging on a company phone, can be read together with the confidentiality debate in the dissent.

The limits of the decision should also be stated. The Council of State did not write a separate reasoning and gave an affirming decision. Facts such as which line some of the messages were sent from, how communication channels were regulated in the contract and whether staff had been informed may lead to a different result in another case. The events relate to 2016 and the legislation of that date.

❓ Frequently Asked Questions

For detailed information and legal support, you can contact Savun Law & Consultancy. Contact details are on the contact page; other decisions on capital markets sanctions can be followed on the Precedent DecisionsTR page.