What Gets a Banker’s Email Flagged at Goldman Sachs: CNBC

CNBC has obtained a document detailing more than 180 phrases flagged by Goldman Sachs for scrutiny.

Goldman Sachs’ compliance department is known to conduct surveillance of employees’ email. It is an automated process which monitors the emails for certain phrases that are flagged for specific scrutiny. The flagged emails are then reviewed to decide whether they present a problem.

Hence, Goldman Sachs bankers should pause and think again before sending an email calling any trade “a sure bet” or a note saying someone “embezzled the account”, according to an article published today by CNBC.

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CNBC has reportedly obtained a document from an unnamed source detailing more than 180 phrases flagged for scrutiny by the monitoring system, giving a rare insight into a large bank’s real-time compliance surveillance operation, and reveals details of how that process works.

Attorneys for Goldman described the confidential document as “a lexicon of terms and phrases used by the Firm’s Compliance department for surveillance of the electronic mail of certain employees.”

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Banks typically monitor email to detect any early indicators of fraud. The Securities and Exchange Commission (SEC) expects that banks’ policies and procedures include monitoring emails although it has no specific rules or requirements as to the search terms banks use to do this.

Insider Trading

Technological monitoring of employees’ email is said to be increasingly common in the financial industry in order to flag activities that may be illegal or may represent insider trading.

According to CNBC, Goldman’s communications monitoring today is more extensive than it was in 2008 and encompasses communications technologies beyond email and rules about profanity in email have tightened. However, it is not a covert operation as Goldman’s employees are told their electronic communications will be watched.

Goldman Sachs also monitors for email about calling financial regulators or organizations, including the SEC, NASD and New York Stock Exchange. One phrase that would be flagged for example is, “Call the SEC.” In this case, the system also watches for “20549,” which is the ZIP code for SEC headquarters.

The question has been raised as to whether all this electronic monitoring actually works. It appears that despite the electronic snooping, some problems crop up time after time.

Perhaps it comes as no surprise that one phrase the Goldman software searched for was “How could this happen again?”

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