Tools such as iMessage, WhatsApp, Facebook Messenger, etc have become the modern way to communicate about trivial things that were once fodder for occasional small talk. It is simply a truth of the world today; I can shoot you a text far more easily than I can connect with you physically, face-to-face.
However, that is causing some issues for highly regulated industries, as Matt Levine relays in his column Money Stuff on 28 September:
…you might have some sort of casual inchoate thought process that is like: Yes, fine, I will use my firm email address or my Bloomberg chat for official business, things that would have been inter-office memoranda in 19481, but when I am just chatting I will use, you know, Snap or WhatsApp or Signal or texts from my personal cell phone. Including when I am just chatting with my colleagues or my clients. Including when I am just chatting with them about business. We’ll talk about stuff — about trades, about business, about desk politics — informally, like we would in person, over some sort of unofficial messaging platform. And then maybe if there’s a trade to be done or a policy to be made or whatever, we will formalize it in an email. But the SEC rule about preserving communications doesn’t apply to talking to my coworkers in person, and so it shouldn’t apply to things that are like that. So if there’s something I want to say to them in person, but that is inconvenient — because we are working from home, or because we are both in the office but I’d have to stand up and walk two seats over to talk to them — then I’ll just put in in my personal WhatsApp and that’s fine.
Given the framing, we should all know it turns out this is not fine and a bunch of banks recently paid some fines for this behavior.
What interests me is the slow and steady creep of the regulatory apparatus as our lives change, while our laws and those regulations are not updated on some periodic basis to account for those evolutions.
It is fascinating that digital interaction via our mobile devices is now more convenient a medium of communication than speaking face-to-face with even our closest geographical neighbors (the people sitting two seats down, even!). I suspect a primary cause is the simple immediacy of being able to reach out, and the allowed asynchronicity of response from the recipient. I can text you immediately and get that thought off my mind, and you can reply whenever it is most convenient. You can even read my message first and decide when and how to reply based on its content. This is superior to the face-to-face model where a response is required and without first knowing the content of the inquiry.
Find Matt Levine at Bloomberg.
The reference to 1948 in that quote is explained by Levine earlier in his text: “In 1948, the US Securities and Exchange Commission published Rule 17a-4(b), which required regulated brokers to keep “originals of all communications received and copies of all communications sent by such member, broker or dealer (including inter-office memoranda and communications) relating to his business as such.” You can find the current version of the rule online here, but you can also find the 1948 original online here, and even on the internet it is pleasingly yellowed.” ↩︎