A new messaging service backed by some of the biggest names on Wall Street is attracting regulatory scrutiny from New York’s regulators.
The New York State Department of Financial Services is interested in the privacy features that lie at the heart of Symphony Communications Services’ pitch as an alternative to Bloomberg’s ubiquitous messaging system — which is used by traders across Wall Street.
Anthony J. Albanese, Acting Superintendent of Financial Services for the State of New York, has sent a letter to the chief executive of Symphony, asking for information about their instant messaging service. Symphony did not return calls or emails seeking comment in time for publication.
The letter, which was released publicly, reads: “Specific areas of interest for our Department include but are not limited to the data deletion, end-to-end-encryption, and open source features of your products.”
Symphony has received backing from the likes of Goldman Sachs, Deutsche Bank and Citigroup, and takes aim at Bloomberg’s chat function. Rate-rigging investigations found that in many cases traders had used the chat function to collude in the setting of interest rates.
Part of the appeal is Symphony’s offer of privacy. Chats are encrypted and only the client can unlock it.
Kevin McPartland, a principal with Greenwich Associates, told Business Insider earlier this year: “If it’s acting like a ‘virtual shredder’ then it’s a problem.”
“If it’s intended to mask something; that’s concerning.”
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