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Wall Street’s war on instant messaging heats up

What would Wall Street look like if instant messaging tools like Bloomberg didn’t exist? Likely, the banking world would appear a lot less scandalous. Online chat tools, once viewed as a simple convenience for busy bankers, have morphed into instruments for collusion, insider trading and embarrassing boy’s club banter. Banks have finally had enough.

After conducting reviews, J.P. Morgan and Deutsche Bank have joined UBS in banning multi-dealer online chat rooms, notably used by bankers who colluded to rig Libor interest rates and foreign exchange markets. A J.P. Morgan source told Reuters that the bank is also banning the use of IM tools for social bilateral purposes, eliminating the potential for “inappropriate” remarks to be made between co-workers. External chats between staff and clients will continue to be permitted, however.

For J.P. Morgan, the move comes just weeks after Chief Executive Jamie Dimon issued a stern warning, telling employees to be “vigilant” about what they post online. “Don’t exaggerate, don’t ruminate, don’t bulls**t,” Dimon said at the time.

If IM bans touch other Wall Street banks, which they are likely to, terminal vendors like Bloomberg could lose their market dominance, as messaging is their most popular feature. Seeing the writing on the wall, Bloomberg, in a bit of good timing, announced on Tuesday that it is rolling out a new single-screen feature that allows compliance staffs to limit user access and monitor messages in real-time. Ben Macdonald, head of product at Bloomberg, acknowledged that the move was, in part, due to worries that regulators may step in and restrict IM use themselves.

Soon, shady bankers will need to brag about their exploits over the phone. Tough break.

Sketchy New Tactic? (eFinancialCareers)

During the offer stage, one financial firm asked a candidate for physical proof of his current salary, clearly in an effort to justify his financial demands. Is this a new trend or a random occurrence?

Happy Day for Jefferies (Financial News)

In a departure from other investment banks, Jefferies will pay out its year-end bonuses in cash. Most competitors are now paying bonuses in deferred cash or stock.

Head East, Young Bankers (Bloomberg)

If you’re a young banker eyeing the fast-track toward the executive level, Asia may be worth a look. Banks in Singapore and other major Asian cities are offering some employees yearly promotions to combat talent poaching. Asian hedge funds are also killing it.

To the Highest Bidder (Financial Times)

J.P. Morgan has reportedly put its Asia-based principal investment business up for sale. The Global Special Opportunities Group, which employs roughly 35 people in Hong Kong, Mumbai, London and New York, could be a fit for Carlyle, Blackstone, KKR or another private equity firm.

Your Toughest Day is Behind You (Robert Half)

Tuesday is by far the most productive day of the week for financial services workers, according to a new survey. The most productive time of day is between 10 a.m. and noon, so quit scheduling those early and late-day meetings.

Not Guilty Pleas (WSJ)

Former UBS trader Tom Hayes and two other men charged for their alleged roles in the Libor rate manipulation scandal have pleaded not guilty, setting up what is sure to be a closely watched trial for many on Wall Street.

Bob’s Back (WSJ)

Former Barclays head Bob Diamond has launched a new Africa-focused acquisition firm, Atlas Mara Co-Nvest, following a $325 million round of funding. No word yet on any potential hiring plans.

Buzz Around the Office

Finding Hope in Tragedy (Buzzfeed)

One of the great stories of the year. James Costello, a victim of the Boston Marathon bombing, has found love. He just got engaged to the nurse who helped him rehab from his traumatic injuries.

Quote of the Day: “There’s still a tendency for junior bankers to move around, often for marginal financial gain. People underestimate the importance of internal connections to their own career success and these connections are lost when you move.” – Nicholas Johnson, J.P. Morgan

AUTHORBeecher Tuttle US Editor

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