Jody Houton

Your fellow investment professional is working irregular hours. They’re quiet, and when they do speak, it is often nonsensical, or littered with profanity — all signs that you may be working with a “bad actor”, and your organization could be just one wrongly worded email, one poorly judged text or one “loose-lipped” phone call from a company-ending crisis…

Here are some telltale signs that may just indicate you’re working with a “bad actor”:

Secretive: While some firms have taken steps to ban the use of personal devices on trading floors, others have decided to implement tighter controls over use, following a series of regulatory fines for traders who were caught sharing sensitive data with third parties. If your colleague is communicating via an unapproved device (ie: their personal mobile phone) this could be an indication that they are engaging in behavior (trading, sharing certain sensitive information, etc.) that they really shouldn’t be.

Over-familiar: There’s nothing wrong with meeting a client or contact for a quick lunch, or a Michelin-starred dinner, or giving them expensive tickets to the world’s most sought-after sporting event — is there? Frequency and value of the gifts and entertainment is key. Does your colleague appear to be having a high number of interactions with their clients at irregular times of the day or meeting with them socially? This could indicate that they are in receipt of gifts and entertainment, which may affect their impartiality (at best), or in receipt of bribes (at worst).

Disrespectful: If your colleague is speaking disparagingly about their company or client at work, perhaps at the water cooler, or on Slack, then this is not only unprofessional, but could also be a red flag indicator that they may be willing to break corporate client confidentiality and not adhere to data protection rules. Breaking non-disparagement clauses in contracts aside, such misconduct may show a predilection for future non-compliant practices, which could result in potential fines for companies.

Mood Swings: Your once verbose and amiable colleague has become monotone and monosyllabic. Their energy levels have dropped, and they’re not responding to calls or emails with the same frequency. One in five brokers has contemplated leaving the industry due to stress. Feeling pressure to meet deadlines and hit targets may lead brokers and traders to take financial compliance risks, cut corners, and make unethical or illegal trades. Their mood swings could indicate that they’ve made reporting errors, or made illegal trades and are worrying about how to rectify or cover them. And, if they’ve not made errors so far, it’s likely that they could well do so in the future.

Talking in Code: Everybody has their own way of communicating. Close friends often have a completely unique way of talking and “in jokes” exclusive to them. On the trading floor, however, there’s a big difference between talking in code with the purpose of hiding trading positions from competitors, and using euphemisms to mask their intention of abusing or manipulating the market. 

The Trading Floor Is Now Digitized 

In an increasingly decentralized and remote workplace, where traders, investors, advisors, and analysts are all working from home, using offline, analog approaches to spot the signs of a bad actor and the signals of rogue behavior has become impossible. This is where Behavox Compliance can help. Its artificial technology identifies behavioral signals in company communication channels (more than 150 data types and counting) and flags any suspect content for review. And with the world’s best detection rates — including a 3x increase in escalations compared to competitors — it helps you catch bad actors quickly and accurately – before it’s too late.

For example, our relationship mapping technology can show the frequency of exchanges between certain individuals, when they took place, how (on which medium), and if they contain certain words and phrases, all of which arms the compliance officer with the necessary tools to analyze, aggregate, and gain actionable insights into their internal data.