JPMorgan Confirms Instant Messenger and Chat Room Ban for Traders

US banking major JPMorgan has confirmed that it has banned traders from using instant messaging services, within its corporate and investment banking (CIB) division, following criticism that banking employees shared sensitive information about key interest and exchange rates via the electronic form of communication.

In a memo sent to employees, JPM's investment banking co-heads, Mike Cavanagh and Daniel Pinto, have prohibited staff from participating in instant message groups involving multiple banks or dealers.

"Effective immediately, all CIB staff are prohibited from participating in electronic chats or instant messaging groups with two or more other Banks/Dealers," the memo said.

"Banks/Dealers include trading desks that are competitors or market-makers, as well as brokers or inter-dealer brokers."

In addition, the bank has banned its staff from all social chat room functions from either internal and external systems.

The memo added that the bank expects all its employees' "communications to be consistent with the firm's Code of Conduct and high ethical standards".

The move by the bank comes as many of its competitors undertake measures to prevent their staff from committing mistakes amid the currency-rate fixing scandal.

Banks including Barclays, Citigroup and Royal Bank of Scotland have banned the use of group instant messaging.

Manipulation via Instant Messengers

Instant messenger services allow users to form groups and share information to all members at the same time.

Global regulators have previously released transcripts from instant messenger conversations when it hit banks with Libor fixing fines.

For example, the US Commodity Futures Trading Commission (CFTC), Department of Justice and the UK's Financial Conduct Authority (FCA) unveiled transcripts of the Libor fixing misconduct that were committed between 2006 and 2010.

The excerpts reflected the awareness of RBS and UBS's conduct and collusion with an un-named interdealer broker.

Last year, Barclays also faced embarrassment when internal communications were published by the FCA as part of its damning evidence against the bank.

A Barclays trader emailed a Libor submitter: "If it's not too late low 1m and 3m [rate] would be nice, but please feel free to say 'no'...Coffees will be coming your way either way, just to say thank you for your help in the past few weeks". His friendly submitter responded: "Done...for you big boy."