TRACK THOSE CHATS
Symphony gets OK
Wall Street’s newest chat program won’t be silenced — but it won’t be as opaque as banks had first hoped.
Four banks got the green light on Monday to use the new system, called Symphony — but only after agreeing to beef up its ability to track chats among traders.
Symphony had tried to entice the banks — Goldman Sachs, Deutsche Bank, Bank of New York Mellon and Credit Suisse — with features that allowed them to erase some of their paper trails, according to Symphony marketing materials that have since been retracted.
But New York’s financial services regulator would have none of it — and forced changes to allow Anthony Albanese’s Department of Financial Services greater insight into what Wall Street’s moneymen were talking about.
“This is a critical issue since chats and other electronic records have provided key evidence in investigations of wrongdoing on Wall Street,” Albanese, the DFS acting superintendent, said in a statement. “It is vital that regulators act to ensure that these records do not fall into a digital black hole.”
The deal with DFS strikes at what had made Symphony so scary to regulators: its extremely sophisticated encryption that some had worried was designed to frustrate law enforcement.
The four banks have agreed to store duplicate copies of their decryption keys for their messages with custodians that aren’t controlled by the bank, the DFS said.
Additionally, Symphony, a separate company, will retain records of all communication made on its platform for seven years.
“We are pleased our discussions with the DFS have been constructive and Symphony’s messaging solution addresses their concerns and further enhances our process around security and compliance,” Goldman Sachs spokeswoman Tiffany Galvin said in a statement.
Chats and emails have become one of the biggest thorns in the side of the megabanks.
Financial institutions have paid more than $74 billion in settlements and fines to regulators for wrongdoing that was traced back to electronic communication, according to data compiled by the CCP Research Foundation and analyzed by The Post.
“Key evidence that regulators used to uncover and investigate those schemes was found in chatroom transcripts and other written communications retained by the banks,” Albanese wrote to Symphony CEO David Gurle in a letter in July, when the regulator first started to investigate the new system.
“The agreement is another positive development on the eve of Symphony’s launch,” Gurle said in a statement.
“Symphony’s platform safeguards against cyberthreats while strengthening customers’ compliance operations and facilitating their ability to meet their regulatory obligations.”
Symphony — now in beta ahead of an official rollout later this month — will compete with the chat and email services of Wall Street’s ubiquitous Bloomberg terminals, which traders have typically used to chat with each other.
Bloomberg, which charges $24,000 a year for its terminals, has complied with regulators’ requests for records about once a month since 2000, The Post has reported.