USA TODAY US Edition
Symphony to retain trader chats
Wall Street banks reach deal with regulator
Goldman Sachs and three other banks have agreed that Symphony, Wall Street’s new secretive messaging service, will retain copies of their chats amid pressure from a New York banking regulator.
The New York State Department of Financial Services (NYDFS) said Goldman, Deutsche Bank, Credit Suisse and Bank of New York Mellon have agreed that Symphony — Wall Street’s version of WhatsApp — will retain extra copies of all ecommunications to and from the banks for seven years, the regulator said in a press release.
The banks will also store duplicate copies of the decryption keys for their messages with independent custodians, or someone not controlled by the banks, NYDFS said.
Symphony, which is slated to roll out officially Tuesday, seeks to win business by promising a secure, encrypted messaging service — including guaranteed data deletion. This prompted questions by regulators who recently helped to uncover a massive rate manipulation scheme using instant e-chats from traders.
“im like a whores drawers,” a Royal Bank of Scotland trader was revealed saying when British regulators released the bank’s digital chats in 2013 as part of a widespread rate-rigging investigation. The comment, which connotes waffling, was made in response to a colleague asking him to make up his mind about the direction he wanted rates to go in September 2009.
Symphony is the brainchild of Goldman Sachs and has attracted backing from more than a dozen financial firms who have invested some $70 million in the company, including BlackRock, Citadel, Citigroup, Jefferies, JPMorgan, Maverick Capital, Morgan Stanley and Wells Fargo.
The service is expected to replace Bloomberg ’s messaging service, which has long been the dominant form of communication on Wall Street but which experienced a snooping scandal by Bloomberg reporters in 2013.