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The Morning Risk Report: Wall Street Regulators’ New Target: Emojis
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Good morning. Emojis 😃 are used to make text messages more vivid and personal, but Wall Street regulators say business-related messages with emojis may pose a problem for financial institutions if the correspondence isn’t captured and monitored properly.
The head of examinations at the Financial Industry Regulatory Authority, the self-regulator for broker-dealers, has said that one priority for the regulator this year is looking broadly at financial firms’ written procedures for supervising off-channel communications, including newer ways of communicating, such as the use of emojis to convey subtextual messages.
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Why emojis? Emojis can complicate the meaning of a message, said Michael Solomon, who leads Finra’s national examination program. For instance, if a client texts a financial adviser saying “that recommendation” followed by an angry, upset emoji, the brokerage firm needs to think about what that message means from a reporting perspective and what it should then do with that information, Solomon said.
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Off-channel communications have been a focal point for Wall Street regulators. Eleven of the world’s largest banks and brokerages in September agreed to collectively pay $1.8 billion in fines to resolve regulatory investigations over their employees’ use of messaging applications that broke record-keeping rules.
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Firms potentially face both software and interpretation challenges to comply. More than 3,600 emojis are available on Apple’s iPhones, and the same emojis can mean different things to different generations and cultures. For instance, a smiley face can be interpreted as happy or telling someone they did a good job, or be seen as patronizing or passive aggressive, depending on who is receiving the message.
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Content from our Sponsor: DELOITTE
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Food Traceability: Leveraging Compliance to Unlock Value
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Regulatory changes often give forward-thinking companies an opportunity to develop business strategies that create value while they work to comply with new mandates. Keep Reading ›
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The FTX Arena in Miami last November, the month the crypto platform filed for bankruptcy. The arena has since been renamed.
PHOTO: MARCO BELLO/REUTERS
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FTX begins talks on reboot amid regulatory crackdown on crypto exchanges
FTX is moving ahead with plans to restart its flagship international cryptocurrency exchange, an effort that will face major challenges as regulators ratchet up their oversight of the industry.
The company “has begun the process of soliciting interested parties to the reboot of the FTX.com exchange,” said Chief Executive John J. Ray III, who took over in November when the exchange filed for bankruptcy.
The crypto company has been holding early talks with investors about backing a potential restart of the FTX.com exchange through structures including a joint venture, people familiar with the discussions said.
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Securities broker faces insider-trading probe tied to Morgan Stanley deals
Federal prosecutors in Manhattan are investigating whether a securities broker and his associates traded on confidential information illegally obtained from Morgan Stanley about planned mergers and acquisitions, according to people familiar with the matter.
In a subpoena issued last month, prosecutors sought records related to Spartan Capital Securities broker Jordan Meadow and his communications with five people, including a former Morgan Stanley employee, about potential M&A deals. The subpoena, reviewed by The Wall Street Journal, said the Manhattan U.S. attorney’s office was investigating possible insider trading, securities fraud and other offenses.
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The heads of Microsoft and Activision Blizzard defended the planned merger of their companies, telling a hearing that could decide the fate of the $75 billion deal they wouldn’t block competition if the acquisition is approved.
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The University of California is suing a number of insurance firms for refusing to pay out on cyber policies nearly 10 years after hackers breached data on millions of patients at its health system.
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A federal judge will soon decide whether to put Legend Venture Partners, which faces civil securities fraud allegations related to pitching pre-IPO shares to individuals, under a receiver to protect what is left of investor assets.
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The spying scandal inside one of America’s biggest power companies: A private investigator surveilled Southern Co.’s CEO, prompting an internal investigation into whether it was commissioned by another executive.
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Potential new restrictions on the sale of artificial intelligence semiconductors to China could come with a hefty long-term cost for the American chip industry—and another setback for U.S. relations with Beijing.
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Women interviewing for Bill Gates’s private office were asked sexually explicit questions. Female job candidates say extreme vetting process by a security firm sometimes included questions about sexual histories.
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The number of defendants, including physicians and business executives, charged by the Justice Department in recent weeks in connection with allegations of more than $2.5 billion in attempted healthcare fraud.
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Federal Reserve Chair Jerome Powell said the decision not to raise rates this month was just a continuation of the Fed’s moderation in the pace of rate rises. PHOTO: TOM WILLIAMS/ZUMA PRESS
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Powell says Fed’s inflation fight could take years
The world’s major central banks have an unexpected problem: Their economies are surprisingly strong.
The Federal Reserve is likely to keep lifting interest rates even though officials this month decided to slow the pace of increases by holding off on another move higher, Chair Jerome Powell said Wednesday.
Powell said because the Fed had lifted rates so quickly last year, there hasn’t been enough time to see the effects of those moves in slowing economic activity and inflation.
“Policy hasn’t been restrictive for very long…so we believe there’s more restriction coming,” Powell said during a panel discussion with other central bankers at the European Central Bank’s annual symposium in Sintra, Portugal.
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Mercenary leader Yevgeny Prigozhin planned to capture Russia’s military leadership as part of last weekend’s mutiny, Western officials said, and he accelerated his plans after the country’s domestic intelligence agency became aware of the plot.
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Qantas Creates Chief Risk Officer Position
Qantas Airways created a chief risk officer role at the company as part of changes to its group management committee.
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Andrew Monaghan, currently executive manager of safety, will serve as the Australian airline’s first risk chief. Monaghan has worked for Qantas for 17 years, previously as chief operating officer for Qantas and QantasLink, its regional airline brand.
The company also said Wednesday it is creating a chief people officer role and naming a new chief financial officer. The hires come less than two months after the company said Vanessa Hudson in November would become chief executive, replacing Alan Joyce.
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