Bloomberg routinely turns over chat records to investigators: source

The new kid on the block is making chat room inroads against stalwart Bloomberg by playing to banks’ desire for sole control of their communications.

Symphony, the buzzed-about system, promises to orchestrate a rival network while allowing firms to house their own chat and email records. The Bloomberg terminal’s instant-messaging system connects the world’s trading desks and ranks among its most popular features.

Bloomberg’s internal network also has been a convenient chat room clearinghouse for the government.

The Department of Justice, as well as commodities and energy regulators, have subpoenaed Bloomberg’s messaging records an average of once a month since 2000, according to a person familiar with the matter.

The Securities and Exchange Commission has been asking for Bloomberg chat records since 2009, according to two people.

“The explosion of technology over the past 10 years, the regulators obviously weren’t on top of it as much as they thought they were,” said Kevin McPartland, a principal at Greenwich Associates.

Most subpoenas were “custodial” and done with the cooperation of the banks. But some subpoenas, such as those tied to money laundering, were sent without the banks’ knowledge, said one person.

“It’s rather remarkable what people will write on email and in chats, not realizing that their communications are being preserved for posterity and prosecutors, and not necessarily in that order,” said Joseph Grundfest, a professor at Stanford Law School and a KKR director.

Symphony and Bloomberg declined to comment.