Importance Of Internal SMS Monitoring Justified by David Petraeus Scandal

Most Companies monitor their employees SMS messages on business owned cell phones as well as email messages legally.  It has become a standard procedure to stay compliant with many of the regulatory mandates by FINRA, HIPAA and the FSA. The importance behind mobile recording and monitoring text messages is to ensure compliance as well as prevention of nefarious communications. Companies use their business phones for personal use which can cost the company a significant amount of money,  not to mention insider trading or any other immoral actions that can be monitored via Email, SMS and MMS.

The private sectors understand the importance of cell phone surveillance and has found it to be a very effective way to thwart any communications which can compromise an organization and its reputation.

But what about the public sector?

Reports suggest that the  David Petraeus case was built off of the discovery of inappropriate e-mails and text messages. Jill Kelley, a close personal friend of Petraeus, received threatening e-mails from an anonymous account and she asked an FBI agent to do some email and text message spying.  The agent discovered that the messages were being sent by Paula Broadwell, Petraeus’s biographer, and had also found e-mail correspondence that revealed the true nature of Broadwell’s relationship with Petraeus.

david petreaus

But why was this process so long? Was it because the top officials are immuned from such things like email and SMS monitoring and are not required to backup their SMS messages?  Does the public sector not take monitoring seriously enough? Does the government only monitor specific people?

This complicated love scandal proves that having one’s  text messages  stored and monitored can be very invasive to the personal life, but it is also necessary to the proper functioning of an organization or business.  It is challenging to keep track of all employees and their activities, but mobile recording and monitoring makes it much easier.

Wall street has realized the importance of Mobile Monitoring, now it’s time for the government to take it a little more seriously.

BROKER’S WORLD: Morgan Stanley Smith Barney Brokers Text Away

BROKER’S WORLD: Morgan Stanley Smith Barney Brokers Text Away

NEW YORK (Dow Jones)–Morgan Stanley Smith Barney to its brokers: U can text now.

The rule change, delivered in a memo in late January, allows brokers with firm-managed BlackBerries to use them for texting. It was prompted by requests from staff in the field, said a spokeswoman from Morgan Stanley Smith Barney, the brokerage joint venture of Morgan Stanley (MS). It makes the company the only big brokerage to allow the practice.

About 2,000 advisers and managers have firm-managed BlackBerries and are affected by the policy. Morgan Stanley Smith Barney will keep a record of the texts, to comply with industry regulations that it retain all electronic messages for three years. The company also says it will use the same process it has in place to review its staff’s emails.

A Morgan Stanley Smith Barney broker based in the Midwest said he doesn’t expect to start texting with his clients, but since he only carries one phone, he’s happy to have an easier way to communicate with his wife.

“For me, it’s more about how can I be the most productive, and that helps a little bit,” said the broker, who requested that his name not be used.

Spokeswomen for Bank of America Corp.’s (BAC) Merrill Lynch, and UBS AG’s (UBS) UBS Wealth Management America said their companies don’t allow brokers to use company-issued mobile devices to text. A spokesman for Wells Fargo & Co.’s (WFC) Wells Fargo Advisors said the company doesn’t issue mobile devices to its financial advisers, and those who use their own aren’t allowed to text clients.

As forms of electronic communication multiply and become more popular, financial services companies are struggling to keep pace in terms of policies and regulatory compliance issues. With the growing influence of smart phones, as well as social networking sites like Facebook and Twitter, the industry has been debating how to help brokers expand the ways they can reach out to clients.

“I think there is a very keen interest in the industry right now on how firms can utilize different technology to engage in business communications,” said Joseph Price, senior vice president of the advertising-regulation division of the Financial Industry Regulatory Authority, Wall Street’s self-policing organization.

Morgan Stanley Smith Barney’s new policy could put it a step ahead of the curve. Dan Nemo, chief operating officer of TextGuard, a company that helps firms monitor and archive communications sent through mobile devices, said he has spoken to brokers who have been frustrated when they have received texts from clients, but couldn’t reply.

“The broker wants to communicate with the customer and client the way the customer and client wants to communicate with them,” Nemo said.

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Will the party ever end?

With the national jobless rates hovering around 9.6% some financial firms continue to throw lavish parties for top traders and sales persons amid layoffs.  Fox Business News reported that Bank of America will be slashing up to 5% of its employees in the capital markets division but will be holding a swanky party at 230 Fifth Avenue, a rooftop bar that was rated among one of the best rooftop bars in New York.[i]

It is amazing how some financial service firms will complain about the cost of regulation and continue to party like the financial crisis did not exist.  The financial services sector as a whole must recognize that it can no longer be “business as usual” and that they have the ethical responsibility to ensure adequate systems are in place to protect the individual investor.  In addition, these firms must take the moral high ground and exercise prudence when trying to reward the hard work of one group of individuals while laying off another group of individuals.


[i] Charlie Gasparino & Sital Patel, FOXBusiness, Published September 23, 2010

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