Hi, Aaron Weinman here! Today, I want to chat WhatsApp. It's easily my most-used app, and the simplest way to communicate with family and friends abroad.
I also talk to Wall Streeters on WhatsApp, but the US government's investigation into record-keeping at banks might nix my chances of getting folks to spill the tea.
Before we dive in, the Federal Reserve is making a crucial policy decision today, and is expected to take aggressive action on interest rates to tackle inflation. I stopped by CBS News to discuss the impact of an interest rate hike.
Here we go.
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1. Bankers are getting more jittery about using encrypted chat apps. Credit Suisse "removed" its global head of equity capital markets syndicate because he used unapproved chat apps with clients, the Financial Times reported.
Anthony Kontoleon, or "AK," is one of the "most-respected" folks in the ECM space, and bankers were surprised at his removal.
The thought that unapproved messaging apps like WhatsApp or Signal could lead to such a senior departure has some bankers worried that similar removals are forthcoming.
The US SEC's investigation into record-keeping practices at banks — and banks' subsequent requests to review staffers' phones — forces dealmakers to rethink how they communicate with clients. Bankers told me they can schedule a meeting via WhatsApp, but business must be conducted through approved communication channels like email.
But one banker reckoned scheduling a meeting could be construed as business, so he's contemplating ditching WhatsApp. Another said he'll delete all our communication because talking to reporters is grounds for dismissal.
Importantly, bankers and clients regularly communicate via encrypted apps. Investment banking is a relationship business. Bankers spend years nurturing client ties, which inevitably leads to informal conversations. Parsing through these chats is a cumbersome process, and bankers will be loathe to ask clients to restrict their conversations.
What started as feelings of frustration is morphing into concern for bankers, as the SEC cracks the whip, and banks incorporate ways to ensure their communication methods comply with regulatory requests.
Here's a report from Rebecca Ungarino, Hayley Cuccinello, and myself on how Wall Street reacted to AK's departure and what this might mean for future communication efforts.
In other news:
2. Coinbase has laid off 18% of its full-time workforce. The crypto exchange's CEO Brian Armstrong said the company grew "too quickly" during the good times, but now needs to cut costs and brace for a possible recession.
3. Goldman Sachs-backed Slync hasn't paid its staff in over a month. The Wall Street bank's growth-equity arm led a $60 million funding round for the supply-chain startup in February last year. Management blamed the payment debacle on software issues.
4. Celsius hires restructuring lawyers. The crypto lending firm hopes the lawyers will help it navigate its sticky financial situation, after it recently froze account withdrawals. Customers now have thousands of dollars trapped in the platform, and no idea what's going to happen to their money.
5. BlackRock, Invesco, and BankUnited dealmakers are tallying a $300 million fund. The Wall Street trio are launching a firm to back underrepresented entrepreneurs.
6. Vista Equity Partners' CEO is teaming up with Base10, the largest Black-led VC firm. The pair are coming together to support HBCUs. These college endowments have often been barred from investing in venture capital and private equity.
7. Twitter insiders fret that Musk will use a "firehose" of data to revise his $44 billion deal for the company. Musk's requests for more information around user data have been granted, and some suspect he'll leverage the knowledge to bolster his claim of fake accounts.
8. Deutsche Bank ignored "obvious red flags" when vetting the über-rich. US shareholders can now sue the German bank over alleged compliance failures, a New York judge has ruled.
9. An upscale, New York-based restaurant went vegan. Eleven Madison Park — where many a banker bonus has been spent — changed the menu, and it's been a chaotic mess of a year.
10. Billionaire investor Leon Cooperman reckons US stocks will plunge 40%. The founder of Omega Advisors, who's net worth is estimated at $2.5 billion, predicted that the US would fall into a recession next year.
Moves on the Street:
- Citi made three new hires in its technology and communications team, hiring three experienced software bankers, according to an internal memo from Citi viewed by Insider:
- Dan McDow is joining as its global head of software after 16 years at Credit Suisse, where he was last its global head of software investment banking.
- San Francisco-based Steve Anderson will join Citi as a managing director in software. He comes to the US bank from Barclays, where he spent 12 years covering software companies.
- Andrew Delia is also joining as a MD in software. He previously worked at Credit Suisse for 10 years, also covering software names.
Curated by Aaron Weinman in New York. Tips? Email [email protected] or tweet @aaronw11. Edited by Hallam Bullock (tweet @hallam_bullock) in London.