How to get away with insider trading by using your mobile device?

$2 billion in regulatory fines to 16 major global banks for not keeping records on mobile communications. Second wave of regulatory investigations into investment firms underway. Tech-led action to deal with the problem? Still zero. This got me thinking that perhaps there is not enough information in public domain illustrating how easy it is to steal and share information using your mobile phone or any smart device.

The following is not to teach the bad actors how to steal. This is to educate the senior bankers about mobile security and highlight the threats typically associated with any mobile or smart device. In other words, sensitive MNPI can be exchanged seamlessly and quickly through unmonitored personal smart devices – with no trace or even a remote fear for the bad actor of getting caught.

Step 1. Get a burner phone

Whilst personal mobiles and smart devices may be banned in some financial firms, no bank is currently monitoring the enforcement of this rule with any technology. To this effect, you can also just as easily get away with a personal phone identical to your work phone, and your employer will be none of the wiser. You will never get caught, as nobody is monitoring any activity associated with your personal devices. The burner phone is the best, as you can just throw it away.

Step 2. Use a smart wearable

These are even better than burner phones. Ranging from smart watches to smart glasses, they barely draw any attention. All you need is to activate your smartwatch and provide a live feed to the bad actor straight from the trading floor without anyone noticing. With the latest Apple iWatch, you don’t even need a phone. Similarly to personal mobiles, the compliance enforcement over smart wearables is zero.

Step 3. Use a personal trading app

Smart devices make personal trading and insider trading incredibly easy. As banks have no visibility over the actual usage of mobile communications in their regulated trading floors, they are far from evidencing and investigating the use of personal trading apps by bad actors on their trading floors.

How to get away with insider trading by using your mobile device?

Step 4. Execute the trade

Getting the trade done is what keeps the world’s banking system running and profitable. The success is not achieved by robots on automated AI-driven platforms. Successful traders are these brilliant and incredibly smart people, with high drive, self-motivation, and discipline to get things done, and make money. It’s the world of high risks, high stakes, and high rewards. Sometimes with any means necessary to get the trade done.

Step 5. Have no records

The banks have no records. Period. Apart from the ‘neighbourhood-watch-style’ he-said/she-said, financial firms have no technology in place that monitors any communications on personal mobiles. As the recent regulatory investigation highlights, the banks were forced to rely on and collect communications records from their employees personally (sic). No record, no crime.

Alas as promised, a simplified step-by-step guide on how to get away with insider trading using just your mobile device. We are not saying ‘use this’ and make easy money. We are saying ‘be aware’ of how easy it is to exchange and exploit market sensitive information without getting caught. We are saying ‘do something’ about this risk before things go terribly wrong.

As we have repeatedly seen from the history of financial crimes, ambiguity and lack of evidence are the bad actor’s best friends. Without technology unmonitored personal smart devices continue to be used on trading floors for receiving and making calls, receiving, and sending messages, or simply left running to quickly pass on MNPI. They provide a fantastic way for the bad actors to steal and benefit. Without technology the bankers continue to be blind to the crime that’s happening under their very noses.

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