Goldman messaging service Symphony to retain trader chats amid pressure

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 e-communications 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 on Tuesday, seeks to win business by promising a secure, encrypted messaging service — including guaranteed data deletion. This concerned regulators who helped to uncover a massive rate manipulation scheme using instant e-chats from traders.

"im like a whores drawers," a Royal Bank of Scotlandtrader 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 plowed some $70 million in Symphony, 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.

"We are pleased our discussions with the DFS have been constructive and Symphony’s messaging solution addresses their concerns and further enhances our process around security and compliance," Goldman Sachs said in an emailed statement.

"Symphony’s platform safeguards against cyber-threats while strengthening customers’ compliance operations and facilitating their ability to meet their regulatory obligations," said David Gurle, CEO of Symphony. "The agreement is another positive development on the eve of Symphony’s launch," he said.