Business

Wall Street banks are tracking everything employees do

Wall Street banks are amping up their Big Brother powers — hiring high-tech surveillance firms that can track nearly every move their employees make, from social media to the dark web and even if there is any irregular ATM activity on their bank accounts, The Post has learned.

The moves by the banks — to protect themselves from stiff fines and to finger potential law-breakers on the payroll — come as the Department of Justice said this month that it would seek to nail individuals during probes and that banks would be expected to cooperate if they wanted leniency in settlements, sources said.

The new tactics may raise eyebrows in some corners of the financial world, but this brave new regulatory world could become the norm.

“It is critical that we balance freedom and flexibility with visibility and governance,” Prakash Nanduri, CEO and co-founder of Paxata, a Redwood City, Calif., company whose software draws on data from social media and the dark parts of the Internet, said in a recent interview.

Paxata is one of a handful of high-tech firms hired recently by banks to step up their oversight capabilities.

Up to now, regulators have relied mostly on the usual investigatory weapons — subpoenaing Bloomberg chats and company emails. And, to be sure, it has worked, helping uncover wrongdoing and leading to more than $74 billion in fines.

But Justice has come under fire — from Congress and others — for not nailing enough individuals responsible for the crimes. That led to last week’s memo from Sally Q. Yates, an assistant attorney general in Washington, DC.

“Companies cannot pick and choose which facts to disclose,” Yates wrote — adding that if companies don’t hand over their employees, including senior executives, the DOJ will throw the book at them.

So banks, looking to get the upper hand over unscrupulous employees, are turning to firms like Paxata and Red Owl Analytics and Palantir — as well as a slew of investigators and law firms who license their proprietary software.

Using these programs, banks are able to scrape together and easily monitor in real time their employees’ social media, how often they send emails on personal accounts, withdraw money from ATMs, when they enter and leave the building, when they plan private conversations, and what they do on the shadowy “deep web,” where Internet activity isn’t logged like it is on Google.

“[Banks] are held to a higher standard about how to police their own people,” Brian White, COO at Red Owl, told The Post.

In adopting these programs, the banks are starting to mimic their overseers, since the Securities and Exchange Commission struck a deal with Palantir last year to sift through huge amounts of data to find unseemly activity.

Palantir, which was founded by PayPal co-founder Peter Thiel, didn’t return a request for comment.

“With the ability to monitor employee behavior in real time for anomalies that might indicate risk due to misconduct, companies can be proactive in their fraud investigations and hopefully prevent illegal activity from occurring, or at least prevent its spread,” Julian Moore, a senior managing partner at K2 Intelligence who had led the prosecution of Ponzi schemer Bernie Madoff at the DOJ, told The Post.