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No doubt widespread and certainly not a good idea for oversight, however, the insinuation that all usage was due to employees wanting to avoid oversight isn't c

• hellbannedguy 5y ago
  Old slick Jamie Diamond knew exactly why his guys were using Whatsapp. "Federal law requires financial firms to keep meticulous records of electronic messages between brokers and clients so regulators can make sure those firms aren’t skirting anti-fraud or antitrust laws." I'm shocked they were doing this since 2018. Diamond probally wishes he had this tech when he was an apprentance.
• brendoelfrendo 5y ago
  One of the big things I was told repeatedly while working for a financial institution is that the appearance of impropriety is, in many cases, just as bad as actual impropriety, and this is why. Oh, you avoided oversight because you wanted to have a better connection with your client? Well, too bad: everyone is now assuming the worst because assuming anything less is how people get away with the worst. And, frankly, it's hard to assume positive intent. These are bankers, they should know this. If they knew it and did it anyway, then yeah, I'm glad they got hit by the fine and I don't really have any sympathy for the blight of bad chat software.
  • ByteJockey 5y ago
    Does this mean that we're training bank employees that "If something looks bad, you might as well do the actual bad thing because the punishment is the same"? Could this have the effect of actually increasing incidents of bad behavior?
    • xwolfi 5y ago
      No, it has the opposite effect on me, a bank employee, to immediately report everything weird because even if I do nothing wrong, want banks to behave legally, and have never personally traded a stock in my life, the appearance of impropriety is just as bad as actual dishonesty. Never did it make me think I could just as well front run clients with a secret account since forgetting to disclose an old account I never used was bad too. I declared late that old account and apologized instead, for instance. I think these rules are, like all rules, also mostly to draw responsibilities in case of trouble: they do nothing to prevent a criminal to crime, but once the crime is done, he cant claim he did everything by the book if the book was so clear.
  • lhnz 5y ago
    I agree that you can't discern the difference between the appearance of impropriety and literal impropriety and shouldn't try to. My point is that the existence of fines and non-stop training courses drilling in the correct messaging software to use to all employees doesn't end this behaviour. Do we increase the punishments or require more training courses to be taken? Will that have any effect? I'm suggesting that if we really care about reducing impropriety we should also improve the software in use.
    • acdha 5y ago
      The fines are what will make the software improve. Someone was slacking on that for years but now they have to pay enough that they could have lavishly staffed an entire company if they could use something like Teams.
      • OnlineGladiator 5y ago
        You're assuming they didn't make more than $200 MM by evading regulations. I'm willing to bet they made significantly more than this and will continue to operate profitably as that is their business. This fine is barely 1% of their quarterly profits.
        • acdha 5y ago
          I was responding specifically to this thread, which is not assuming malice but was arguing that bad software incentivized using WhatsApp. In that case, licensing or building anything would be cheaper. If this was done for malice, I agree that the fine would have minimal effect.
          • OnlineGladiator 5y ago
            Fair point. My mistake.
            • acdha 5y ago
              No worries — I certainly wouldn’t rule out malice from them but in this case general IT mishaps seems entirely plausible.
• DisjointedHunt 5y ago
  This is incorrect. When you work in a heavily regulated industry such as Finance, everyone knows the basic requirements of official record keeping and process. The industry has a long history of being hit with "slap on the wrist" type fines for things exactly like this ie, using unofficial tools and software to communicate.
• lordnacho 5y ago
  I've worked in finance for a long time, I don't buy this line. People are getting told all the time that they need to use certain tools, they know what the rules are. You can't just set up your own line to clients just because it's convenient. It's not like everyone is doing illegal stuff just because they can set up WhatsApp either, it's just it's been drilled in so many times, there's no excuse.
  • tata71 5y ago
    Your experience is anecdotal, and I have anecdotal experience directly to the contrary. Laws don't stop people who don't know, don't understand, don't care, or some combination.
    • lordnacho 5y ago
      Sorry but what is anecdotal about this? It's well documented that there are rules that people are told.
      • kolbe 5y ago
        Please tell me the rules, since you're so knowledgeable and the rules are so obvious. I worked in finance. I read our company's rules. I attended compliance meetings every year. And I could not tell you for the life of me if a co-worker WhatsApped me to ask if I was coming to a bar on a Saturday, if we were violating any rules. The line between personal and business isn't black and white, and broker dealers are required to neatly separate them into "things you can talk about here and nowhere else" and "things you can only talk about elsewhere and never here." Oh, and to boot, WhatsApp is encrypted, so you never know what people are talking about anyway. So, even if they are talking about personal stuff as friends, the fact that they could have been talking about business can make it a fineable offense, even though they wouldn't have been allowed to talk about it in work channels. So, please tell me exactly why this is such an easy thing to follow. My personal view is that the SEC just wants to ban all finance employees from ever being allowed to use encrypted messaging (9mm people in the US), which would then put pressure on Facebook to decrypt its messenger (the government's actual goal). And they know that going after places like JPM will get all the finance-hating public riled up, and ignore the fact that this is just one more example of the government trying to get more power to spy on people. Just my take.
• xwolfi 5y ago
  The argument the SEC presented however is that it hindered investigations which means it was extreme. There s no excuse dropping an email with the details of the communications out of channel was impossible, even by hiding the fact it was out of channel: after all you could meet the client on premise and discuss the same things with no record and everyone would agree an email memo should be shared. Here it feels like it became completely normal to take decision completely out of record, and with no way to trace who said what when, no way to defend themselves out of suspicion, which is why we keep records in banks in the first place.
• tomp 5y ago
  No, it's correct. There's no reason to use WhatsApp, and all reason not to use WhatsApp, except if you want to avoid oversight. Working in finance, in general, isn't "good user experience". Compliance manuals (reread yearly!), compliance training (e.g. anti-money laundering even for employees that have no contact with any cash, bank accounts or clients), trading oversight/restrictions, ... But people do it because it is (might be) worth the money. "All communication must be recorded" is the least of these nuisances. People who avoid it are doing so willingly, for a reason. Edit: Also, judging by the title, this is next level bad: JPMorgan "letting" means they knew and didn't do anything against it (e.g. fire employees or report them to the authorities). Normally the punishment for these kinds of things is severe, you can easily get "cannot ever work in finance again" by the regulator.
  • kolbe 5y ago
    This is all very incorrect, and I am surprised someone so intelligent and literate would ignore the obvious flaws in an argument like this. (1) all of your evidence comes from the prosecution side of a legal argument. None of their claims were litigated in court. And you should know better than to think lawyers defending their clients make honest accusations. (2) there are tons of good reasons to use WhatsApp. It’s the most used digital messaging platform in the world. Are all JPM employees supposed to just cut off communication with their European friends? Never talk to anyone from a country worried about spying and thus using encrypted messaging? It’s shocking to me how quickly smart people on HN can forget about the virtues of encrypted messaging the moment Big Brother sticks a bank with a fine and makes insinuations that they maybe could have maybe been using it to make money in an unsavory manner.
    • tomp 5y ago
      Obviously they can use WhatsApp to discuss personal matters. That's not what this is about, according to the article: > Even the managers and senior personnel responsible for compliance used their personal devices to communicate sensitive business matters, the SEC said.
    • simonh 5y ago
      You are deeply, profoundly misguided on this. The regulations on communications in finance, and what kinds of communications are covered by these restrictions and which aren’t, are clear and well understood in the industry.
• MR4D 5y ago
  FTA : “Federal law requires financial firms to keep meticulous records of electronic messages between brokers and clients so regulators can make sure those firms aren’t skirting anti-fraud or antitrust laws.” If you don’t want to follow this law, then don’t text your clients. It’s that simple. Also, every client has email, which is compliant. Use that. [0] I’ve worked in finance for years - this is a simple rule (although hard for firms to police).