
Wall Street's WhatsApp Secret: Illegal Texting Is Out of Control - ayanai
https://www.bloomberg.com/news/articles/2017-03-30/wall-street-s-whatsapp-secret-illegal-texting-is-out-of-control
======
humbledrone
"Wall Street's Restaurant Secret: Illegal Talking over Lunch is Out of
Control"

> 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:
> street-level restaurants like McDonalds and Taco Bell.

> “They’re always behind,” said Jack Rader, a managing director at ACA
> Compliance Group, which sets up monitoring systems for financial services
> companies to flag potential regulatory problems. “It’s almost impossible for
> a compliance department within buyside or sellside firms to stay ahead of
> communications technology that is available for employees like the basic
> human activity of talking in private at a restaurant.”

~~~
dwaltrip
Oh c'mon. Encrypted messaging apps are orders of magnitude more efficient and
discreet for communication in the context of the overall finance industry,
compared to "talking over lunch" (or any other meatspace location).

Not sure I have any well formulated thoughts about the significance of this
trend among finance types... but I don't think your analogy is terribly
illuminating.

~~~
humanrebar
> Encrypted messaging apps are orders of magnitude more efficient and discreet

What's more discreet than a quiet conversation that you can deny happened
later? You can take screenshots of just about any digital communication. The
rest you can take photos of with your smart phone.

I'll grant you efficiency, though, especially if it's a group conversation and
some amount of coordinated activity is involved.

~~~
manigandham
In-person meetings are far more conspicuous. Other people, security cameras,
etc.

------
tobyhinloopen
So the media starts to scare us about illegal texting. Oh no! Lets make all
chat apps non-secure so the bankers can no longer chat illegally anymore

~~~
J-dawg
That was my first thought as well. Look out for more "[unpopular group] uses
[encrypted service] to break the rules" articles coming soon.

~~~
lomnakkus
Well, it _is_ an easy way to "sell" these things...

Anyway, I've got two: paedophiles and terrorist.

Apparently, traders have now joined that elite. I'm just surprised bankers
didn't make it there first... given the public sentiment. (I'm not sure I have
any position (heh) on the matter myself.)

~~~
ctack
Texting while driving does actually kill, but there is a less
definable/unpopular "them" to target.

~~~
narrator
That, and encrypted texting while driving is just as dangerous as unencrypted
texting while driving.

------
smp_
The subtlety missing is that the 'chat room' scandals were (at least in part)
conducted on Bloomberg's own platform[1] And that one of the 'big brother-like
databases' was the one their journalists used to write articles based on how
their clients used their platform [2] The article doesn't really touch on the
publisher's skin in the game other than mentioning how compliance friendly
their chat now is. Hmm...

[1]
[http://www.bbc.co.uk/news/business-21358362](http://www.bbc.co.uk/news/business-21358362)

[2]
[https://mobile.nytimes.com/2013/05/13/business/media/bloombe...](https://mobile.nytimes.com/2013/05/13/business/media/bloomberg-
admits-terminal-snooping.html)

------
hackuser
> A big reason more and more Wall Street types have turned to messaging apps
> is because they are tired of having every written word -- work-related or
> not -- ingested into vast, Big Brother-like databases ...

I'm tired too.

------
phreack
So people have private ways to communicate, and sometimes they break the law
by communicating forbidden stuff, hasn't that been a thing for ages? Why the
sudden hate on Whatsapp, if there's a rise of law breaking messages, the root
cause is elsewhere.

~~~
mc32
Probably due to fewer evidentiary "crumbs" left behind. No witnesses to
meetings, conversation eavesdroppers or recorded calls --now everything is
more or less deniable and irrefutable, unless one of the parties decides to
double cross the other.

~~~
laumars
You cannot prosecute someone based on hearsay. In someways Whats App makes it
easier because you could take the phone as evidence and see a record of all
non-deleted correspondence complete with time stamp rather than trying to
build a case based on two buddies grabbing a beer together.

Which is why a lot of these technologies are targeted. Not because encryption
makes it harder for enforcement agencies since there's always been a plethora
of ways to communicate in secret. But because gaining back doors to these
applications makes it easier for them than it's ever been.

Sadly the point enforcement agencies always overlook is they're basically just
fighting a game of "wack a mole". Encryption isn't something that's going to
go away. Not even if you legislate against it. People know it exists and there
are a thousand different ways to run software on your handset - even just via
web sites directly thus bypassing all the controls for side-loading native
apps. So all this posturing about the "evils" of WhatsApp is just a monumental
waste of everyone's time.

------
selckin
Who did whatsapp piss off? there seems to be real campaign against them

~~~
metalmanac
The campaign is against all encrypted apps and they just happen to use
WhatsApp as a scape goat since it has the largest user base. Targeting Signal
or some other obscure encrypted messaging app wouldn't be as effective.

------
abhv
encrypted apps dont break SEC laws, people break SEC laws

~~~
mtgx
My first thought when reading the headline. It's not "illegal texting". It's
the _crimes_ they do via texting (or via any other communication medium) that
are illegal.

Also, I thought the government already didn't care about any of the bankers'
crimes, because it never seems to prosecute them. If there are banking crimes
committed out there, I'm sure the NSA (and now 16 other agencies [1]) are
aware of them, even going back several years. They just choose not to
prosecute them.

[1] [https://www.nytimes.com/2017/01/12/us/politics/nsa-gets-
more...](https://www.nytimes.com/2017/01/12/us/politics/nsa-gets-more-
latitude-to-share-intercepted-communications.html)

~~~
0x445442
Bingo on the selective prosecution point.

------
hackuser
Isn't the obvious solution to ban personal phones, or personal apps, at work?
It's not hard.

~~~
throwaway287391
Do you honestly think that's a feasible solution? Who in their right mind
would work for a company that doesn't allow them to bring their personal phone
to work? Unless it were required by law, no company would do that to their
white collar employees -- they'd all leave for a company that doesn't treat
them like eight year olds. (I feel like this would never be suggested on HN if
we were discussing software companies rather than finance.)

~~~
cm2187
Mobile phones are banned on trading floors. It is just hard to enforce for the
reasons you mention.

~~~
billpg
They still have trading floors? I thought all trades went electronically these
days.

~~~
cm2187
Only on some very specific and liquid products (shares, FX, futures, perhaps
certain bonds). Most products still trade over the counter (i.e. by phone).

------
strictfp
In other news: they also meet and talk!!!

~~~
tajen
Yes. Which kind of journalist write these pieces anyway? What kind of
publisher is so corrupt that they'd both have the wrong idea of freedom, the
wrong journalist to write them, the wrong editor to validate the article and
the wrong readers who are gullible enough that this headline makes it through
to reader's vote?

------
scotty79
If your rule requires assigning a policeman to look over every person's
shoulder to enforce it then you should probably reconsider it.

~~~
blincoln
I agree. I'm not one to use the "disruptive" term frequently, but that's
what's going on here, IMO - traders are using disruptive technology. As with
mp3s, the answer (again, IMO) is not to try to prevent their use, but to adapt
the business model and laws to take advantage of them. That might mean
significant changes to - and upheavals in - the financial world, but the
financial world has never had qualms about inflicting those on other people.

Sooner or later, people are going to be able to communicate using encrypted
channels without even needing an external device, just like they're going to
be able to capture stills and video without needing anything other than their
eyes and implanted hardware.

Rather than trying to enforce increasingly-unenforceable rules, I think it
makes more sense to think about the business (or other organization) those
rules are designed to protect, and make a call on whether it's even practical
or needs to be reworked - or maybe even scrapped and replaced with something
else.

------
staunch
"Out of Control" is freedom.

------
lp001
I would argue there is no such thing as illegal texting. There is the illegal
sharing of information, which takes the issue right back to the perp, not to
an app.

Why didn't the political motivated demand to ban all TOYOTA trucks after ISIS
was seen parading in hundreds of them unchallenged though the Middle East?

It is not the app, the truck, the gun. It's people.

------
cm2187
Hum. I mean I don't condone conducting illegal activities over encrypted chats
of course (particularly given than some activities quoted in this article are
pretty shocking and would cost these banks the loss of customers), but we
should also keep in mind what regulators and compliance departments do with
this monitoring of conversations.

The best example is the Fabrice Tourre affair at Goldman Sachs. Two examples I
noted:

First the SEC quotes Tourre _" More and more leverage in the system, The whole
building is about to collapse anytime now…Only potential survivor, the
fabulous Fab[rice Tourre]…standing in the middle of all these complex, highly
leveraged, exotic trades he created without necessarily understanding all of
the implications of those monstruosities!!!"_ [1]

Where the actual sentence was (translating the bits in French): _You should
take a look at this article... Very insightful... More and more leverage in
the system, the whole building is about to collapse anytime. Only potential
survivor, the fabulous fab (as Mitch would kindly call me, even though there
is nothing fabulous about me, just kindness, altruism and deep love for some
gorgeous and super-smart French girl in London), standing in the middle of all
these complex, highly leveraged, exotic trades he created without necessarily
understanding all the implications of these monstruosities!!! Anyway, not
feeling too guilty about this, the real purpose of my job is to make capital
markets more efficient and ultimately provide the US consumer with more
efficient ways to leverage and finance himself, etc_ [2]

I wouldn't write that in an email, but still, the sentence has a very
different meaning with the bits edited out by the SEC back in.

Second example, one of Tourre's managers was quoted writing _" boy that
timeberwof was one shitty deal"_. This was repeated over and over by congress
as if it was a reference to the quality of the collateral of the transaction,
i.e. Goldman Sachs sells some product to a client that they call internally a
shitty product. But if you look at the actual email trail [3], they are not
discussing about the quality of the collateral in that CDO, but of the fact
that they are left with a $300m unsold position, which understandably is
undesirable as a market maker.

So here we have examples of compliance departments sending unrelated personal
emails to the regulators (in a shameless attempt to scapegoat an employee) and
regulators editing sentences to alter or ignore the context. No wonder why
bankers aren't keen to have their conversations on record.

[1] [https://www.sec.gov/litigation/complaints/2010/comp-
pr2010-5...](https://www.sec.gov/litigation/complaints/2010/comp-
pr2010-59.pdf) page 7

[2]
[http://i.telegraph.co.uk/multimedia/archive/01623/Fabrice_To...](http://i.telegraph.co.uk/multimedia/archive/01623/Fabrice_Tourre_ema_1623617a.pdf)

[3]
[https://www.hsgac.senate.gov/imo/media/doc/Financial_Crisis/...](https://www.hsgac.senate.gov/imo/media/doc/Financial_Crisis/FN1623-2406.pdf?attempt=2)
page 224

------
eternalban
Did I miss it or did the reporter in this article neglect to mention the
parent company's Bloomberg Messaging Service?

------
elastic_church
I don't want the government I pay to spend ANY time on this. I like to think
of budget accountability as scrutinizing your partner over their spending
decisions in a joint bank account. Just stop wasting time and money on that!

------
isubkhankulov
this sounds like Bloomberg LP terminal advertising

------
ruleabidinguser
> They’ve learned even the slightest misinterpretation can land them in hot
> water -- not only with compliance, but with prosecutors on the lookout for
> financial crimes.

This is exactly the issue with police body cams.

~~~
sametmax
The issue with every way of gathering info.

The question is "are data from body cams more armful that they help preventing
bad behavior".

------
baq
looks like we're in a bubble.

