Two powerful commodities executives at Morgan Stanley are out after engaging in the improper use of WhatsApp for communications — which goes against the bank's compliant communications policies — a source familiar with the situation told Business Insider.
Nancy King, global head of commodities, and Jay Rubenstein, head of commodities trading, are departing Morgan Stanley after utilizing WhatsApp. The messaging platform has haunted Wall Street for its end-to-end encryption, which can conceal the identities of individuals who are using the app.
Bloomberg previously reported the departures on Tuesday, citing SparkSpread as the original source of the information.
King did not immediately return a request for comment. Rubenstein declined to comment when reached by Business Insider.
The departure ends a 34-year career at Morgan Stanley for King, who has been with the firm since 1986, and is considered one of the most powerful women on Wall Street.
Crain's previously named her to its list of notable women in banking. A long-time veteran of the commodities team at Morgan Stanley, King served as the division's chief risk officer and head of flow oil liquids before heading up the entire group in 2015, according to Crain's.
For Rubenstein, the departure concludes more than 13 years with the firm, where he first started as a Western US power trader in 2007, according to his LinkedIn page. His profile notes that he stepped into the role of global head of commodities trading in June 2019.
Communications compliance has confounded Wall Street institutions for years, as they try to prevent the use of unapproved tools like WhatsApp
While the two executives were using WhatsApp to communicate, it's unclear what precisely they were exchanging messages about. According to the Bloomberg report, the bank didn't find any wrongdoing, beyond the general use of WhatsApp.
The source familiar with the situation told Business Insider that King and Rubenstein had displayed a "failure to supervise use of the communications within the commodities business," which led to their ultimate departures. Their departures are said to have been voluntary.
The source suggested that, while Morgan Stanley does not have plans at this time to cull other staff for breaking communications compliance, it could do so if future infractions come to light.
Even just stepping out of bounds on approved communication channels can jeopardize the careers of even the most senior executives. Indeed, this isn't the first time that Wall Street has cracked down on financiers for improper communications.
For traders, using WhatsApp as a communications method has confounded Wall Street banks because it makes communications far more opaque and difficult to trace than other tools, such as the Instant Bloomberg text chat feature, which archives communications.
In January JPMorgan Chase put credit trader Edward Koo on leave while looking into whether he may have breached JPMorgan's communications policies by utilizing WhatsApp, according to a Bloomberg report. He was later dismissed for creating a WhatsApp group and using it to talk market chatter with other employees, and bonuses for 11 other traders were cut, Bloomberg reported.
Even in cases when firms don't suspect their traders of engaging in wrongdoing in their communications, the simple act of using an unapproved communications channel is enough to lead to a suspension or more serious enforcement.
