A problem with a software contract threatened to impede instant messaging communications between traders and others in the financial industry this week.
U.S. District Court Judge Colleen McMahon ruled that Thomson Reuters had to stop using its instant messaging software by Friday after failing to make a final payment to the contractor that provided the technology.
The Reuters news service 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 IM while also complying with Sarbanes-Oxley and other Securities and Exchange Commission regulations that require archiving and retrieval of electronic communications. Most instant messages are not stored.
McMahon said 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. The contract required final payment for permanent rights to the software. The ruling came out last week and statements in the court filings made it appear that the ruling would create a crisis among traders.
"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 a statement released Tuesday.
A news announcement from FaceTime went on to outline Reuters' own court arguments to support its claims of an impending crisis that would "cripple" Reuters' customers.
Representatives for Reuters could not be reached immediately for comment. But The Wall Street Journal reported Wednesday that the company had established a workaround so instant messaging would continue.