Oh oh! The “fun” police are getting savvy ladies & gentlemen. Actually its the compliance & HR police of financial firms that are now focusing on those encrypted messaging apps to stop illegal and questionable communication. No more “sexist comments”, off color jokes, rating the ‘hotness’ of co-workers OR (gasp) inside information. Yup, those “disappearing” messages may have a way of re-appearing. So, if your gonna use the apps “borrow” your co-worker’s device. They probably won’t care.
“Dirty jokes and NSFW GIFs. Snaps of unsuspecting colleagues on the trading floor. Screenshots of confidential client positions.
All that — and, on occasion, even legally dubious information — is increasingly being trafficked over the new private lines of Wall Street: encrypted messaging services like WhatsApp and Signal.
From traders to bankers and money managers, just about everyone in finance is embracing these apps as an easy, and virtually untraceable, way to circumvent compliance, get around the HR police and keep bosses in the dark. And it’s happening despite the industry’s efforts to crack down on unmonitored communications, according to conversations with employees at more than a dozen of Wall Street’s most recognizable firms.
Just this week, a former Jefferies Group banker was fined in the U.K. for sharing confidential data on WhatsApp.
In many ways, the development reflects a cultural shift. At big banks and small shops alike, rowdy trading desks and the boys-will-be-boys ethos are no longer tolerated, at least publicly. But the widespread use of encrypted apps is also raising a deeper concern: It could enable reckless behavior that’s all but impossible to police and lead to abuses like the chat-room scandals involving Libor manipulation and currency rigging.
“You’re really able to operate outside of the bank,” said William McGovern, a former SEC branch chief and senior lawyer at Morgan Stanley who now works at law firm Kobre & Kim. “We have seen in our investigations that the ground is shifting under everyone, and technology changes are driving a lot of it.”…