Xbox Chat Exposes A Shocking Wall Street Insider Trading Scheme By A Former Goldman Sachs Employee - Microsoft (NASDAQ:MSFT), Blackstone (NYSE:BX), Goldman Sachs Gr (NYSE:GS)

A former Goldman Sachs Group Inc GS employee has been charged with using Microsoft Corp.'s MSFT Xbox chat service to pass insider trading information.

What Happened: Anthony Viggiano, a former Goldman Sachs financial analyst, has been charged by the US Securities and Exchange Commission (SEC) with conducting insider trading using Microsoft's Xbox audio chat service.

"As alleged in our complaint, Anthony Viggiano violated his employers' trust by misusing his access to confidential information to repeatedly and unjustly enrich himself and his friends," SEC said in a statement.

The SEC complaint notes that Viggiano generated over $400,000 in illicit gains through this tipping scheme that he deployed using Xbox audio chats, trading insider secrets about over half a dozen upcoming deals. Viggiano worked for two Wall Street firms, Goldman Sachs and Blackstone Inc. BX.

Why It Matters: Viggiano has been accused of using encrypted chats to trade this insider information. While Signal chats are end-to-end encrypted, the status of Xbox audio chats is not clear – Microsoft's terms of service say that these chats are not recorded by default, but the encryption status remains unclear.

With that said, Xbox audio chats can be recorded and reported when "inappropriate" behavior is observed. This is essential since many underage users use Xbox, but the side-effect is that Xbox chats are not the best regarding privacy.

Back in July, Xbox's GM of Trust and Safety confirmed to The Verge that employees don't listen in on audio chats. "Recording is strictly done through the reporting functionality, and it's only available for moderation purposes," he said.

Image: Microsoft

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