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Thomson Reuters Replaces IM Software To Avert Wall Street Disruption
A U.S. District Court Judge ruled the firm had to stop using its FaceTime instant messaging after failing to make a final payment to the contractor that provided it.
Thomson Reuters on Wednesday said it averted a communications crisis in the financial industry well in advance of its Aug. 1 deadline to stop using its instant message software.
It did so by building its own in-house solution.
U.S. District Court Judge Colleen McMahon ruled last week that Thomson Reuters had to stop using its FaceTime instant messaging software by Friday after failing to make a final payment to the contractor that provided it. Reuters news service had used FaceTime software for an instant messaging service it sold to traders and others in the financial industry. The software helped Wall Street insiders use instant messaging while also complying with Sarbanes-Oxley and other SEC regulations that require archiving and retrieval of electronic communications.
Reuters paid $1.3 million for a two-year contract with FaceTime but failed to make its final installment of $150,000 until after its contract expired, according to court records. The contract required final payment for permanent rights to the software and long-term storage.
Although statements in the court filings and in FaceTime news announcements indicated that the ruling would create a crisis among traders, Reuters spokesman Joe Christinat said Thursday that the company migrated to new software early this week. He said he cannot comment on statements in the lawsuit but he also said there was never an impending crisis.
Six or seven months ago, Reuters' own IT staff began developing their own software for instant messaging, Christinat said. The company created new software that is integrated with Global Relay's long-term storage, which Reuters had already been using to archive instant messages for SEC and Sarbanes-Oxley compliance, he said. FaceTime's software simply collected and stored the communications in the short-term, according to Christinat.
By Sunday, Thomson Reuters moved to a parallel system. By Tuesday, it had stopped using FaceTime, Christinat said.
"So far, the only reason customers have noticed is because it became news," he said.
FaceTime released a statement the same day Reuters stopped using its software and outlined Reuter's own court arguments to warn of an impending crisis that would "cripple" Reuters' customers.
"While we are pleased that FaceTime's intellectual property rights are protected, we are concerned about Reuters' timetable for installing replacement technology in light of its representations to the court as to its ability to provide adequate compliance protection for its customers," Kailash Ambwani, president and CEO of FaceTime Communications, said in the announcement.
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