August 10, 2015

Senator Warren asks regulators about concerns related to new system that could hide Wall Street communications, hinder enforcement

WASHINGTON, DC - In a letter sent to six financial regulators today, United States Senator Elizabeth Warren (D-Mass.) asked about compliance and enforcement issues related to a new communications tool created by Symphony Communications LLC for use by financial institutions. The senator raised concerns about Symphony's description of the new system, "which appear(s) to put companies on notice - with a wink and a nod - that they can use Symphony to reduce compliance and enforcement concerns," and asked the federal regulators for information about the impact of this system on their ability to enforce the law.

In her letter, which was sent to heads of the Federal Deposit Insurance Corporation (FDIC), Commodity Futures Trading Commission (CFTC), Securities and Exchange Commission (SEC), Department of Justice (DOJ), Consumer Financial Protection Bureau (CFPB), and Financial Industry Regulatory Authority (FINRA), Senator Warren noted that Symphony has described its system as a way to "prevent government spying," with "no backdoors," suggesting that it could be used to to reduce compliance and enforcement concerns.

Senator Warren explained, "The communications that Symphony will allow companies to hide from ‘government spying' - such as text messages and chat room transcripts - have proven to be ‘key evidence' in many previous regulatory and compliance cases that have uncovered criminal action by Wall Street...If banks are now making this information more difficult for regulators to obtain and interpret, it could prevent these regulators from identifying and preventing future illegal behavior."

Read the full text of the letters here:



Photo credit: Rev Stan, licensed under Creative Commons.