NY Post suggests Symphony planned the thwart regulatory probes
NY Post suggests that Symphony’s was telling clients that it will give them greater control over their data, and save them “billions of dollars in fines”. As we reported last month, the NY DFS asked the firm for details of its retention capabilities and policies, that would ensure that the system was compliant with market regulations. The NY Post states that Symphony removed a promotional video from its Web site, that mentioned "billions in savings", along with a reference to data deletion, after the NY DFS wrote to the firm. It also highlights a fresh concern about the platform, that investigators will, in many cases, need to get records from the firm being probed, tipping them off in the process.
Forget about Sen. Elizabeth Warren. The worst scourge on Wall Street is overly chatty traders.

Since 2010, the world’s 13 biggest banks have shelled out more than $74 billion to settle probes, ranging from interest-rate rigging to currency manipulation, where incriminating exchanges between traders provided key evidence, according to a Post analysis of data compiled by the CCP Research Foundation.

“Those crimes may not have been possible without electronic communication,” said Brandon Garrett, a professor at the University of Virginia School of Law.

The eye-popping figure is a big reason why Wall Street is backing a new cutting-edge communications system. Symphony promises to give its clients, including Goldman Sachs and JPMorgan Chase, greater control of their data — and save them “billions of dollars in fines,” according to a company pitch to clients.

While banks are backing the system, regulators are wary. Last week, New York’s top financial regulator asked Symphony Communications to explain its encryption and record retention after the startup touted “guaranteed data deletion” in its marketing materials.

Symphony removed a promotional video from its website touting the billions in savings, along with the reference to data deletion, after the Department of Financial Services’ acting superintendent, Anthony Albanese, sent a letter to Symphony Chief Executive David Gurle seeking more details.

DFS officials also met with the messaging startup last week ahead of the rollout, sources said.

Another concern about Symphony — one that hasn’t been made public — is that it will make it harder for regulators to launch probes without tipping off the potential target, said current and former law enforcement officials.

Symphony requires clients to store chats, emails and other data on their own servers rather than relying on a third party.

This means when investigators subpoena records, they will — in many cases — have to get them from the firm that is being probed.

Symphony said it encrypts and stores client data in “the cloud.” Once the client downloads its own data and has the encryption key, Symphony deletes the data from its own servers.

The system allows banks to “safeguard their data from cyber-security threats, and help protect firms from data breaches,” the company said in response to questions from The Post.

It also means investigators must get the encryption key from the company to decode it, sources said.

Symphony also promises “real-time monitoring” of chat rooms — i.e., eavesdropping. Keyword filters allow compliance chiefs to pinpoint and stop problematic chats, CEO Gurle told The Post last year, although one law enforcement official said traders can easily get around it.

Some of those chats have been downright damning.

“If you ain’t cheating, you ain’t trying,” wrote one Barclays trader in a chat room that was at the center of the currency-rigging probe.