Elizabeth Warren is worried that banks will use a new messaging system created specifically for financial firms to skirt rules and avoid regulatory oversight.
In a letter sent to regulators Monday, the liberal Massachusetts senator and outspoken critic of Wall Street warned that the messaging system, Symphony, could prevent them from doing their jobs.
Symphony’s advertisements “appear to put companies on notice — with a wink and a nod — that they can use Symphony to reduce compliance and enforcement concerns,” Warren said in the letter, sent to the Securities and Exchange Commission, Federal Deposit Insurance Corporation and other agencies.
Symphony aims to compete with Bloomberg and the host of other communications tools used by bankers. Expected to be launched soon, it has the backing of major banks such as Goldman Sachs and HSBC, according to the Financial Times.
Part of Symphony’s appeal is that it would provide an alternative to Bloomberg, which two years ago admitted that its reporters spied on the customers who used its terminals for financial communication.
The new services would also offer encrypted messages.
Warren noted that the company has boasted that its system will prevent “government spying.” In recent regulatory cases against banks, such as ones involving banks’ manipulation of exchange rates, officials have used instant messages, chats, or text messages as key evidence, Warren noted.
The Democratic senator asked five agencies and the private industry regulator FINRA whether Symphony would evade their current guidelines for firms’ communications and whether it would prevent them from doing their jobs in the future. She gave them a September 6th deadline for a staff briefing.
