That’s a $h!#ty Policy

On the front page of today’s Wall Street Journal is story about one of the fallouts from Goldman Sachs’ recent problems with the SEC: George Carlin Never Would’ve Cut It at the New Goldman Sachs.

One of the most sensational bits of Goldman Sachs fiasco was an email from a Goldman executive “[B]oy that, timberwolf was one $h!#ty deal.” Apparently, Goldman thinks the solution is to ban profanity in electronic messages.

Of course, everyone needs to pay closer attention to what is written down in email. They are often reviewed and taken out of context during litigation. Saying it was “$h!#ty deal” is more sensational than saying it was a “bad deal.”

Monitoring language in email has been part of financial service compliance for years. The SEC requires that compliance monitor for improper activity and advice. It will be easy enough to have the monitoring program also search for George Carlin’s “Seven Words You Can Never Say on Television” and their variants.

The big problem will be false positives once you start getting into the variants. That means frontline employees and deal flow will be get emails bounced back or blocked. Inevitably, compliance will get the blame for messing up a deal.

The other problem is enforcement. The first line of enforcement will probably be to block messages from being sent with profanity in them. That works as long as you can eliminate false positives. The alternative is to notify compliance when a message has profanity. Compliance can then keep track of the number of messages and report back to management for discipline.

“Employee A had 354 message with “$h!#ty”, 1,567 with F@(k, and 456 with this word which I don’t know but sounds dirty.”

Sounds like a $h!#ty policy and $h!#ty role for the compliance department.