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Deleting Emails Costs Morgan Stanley $1.45B
DoubleWhopper writes "The financial giant Morgan Stanley lost a $1.45 billion judgement yesterday due, in part, to their failure to retain old email. The judge in the case, 'frustrated at Morgan Stanley's repeated failure to provide [the plaintiff's] attorneys with e-mails, handed down a pretrial ruling that effectively found the bank had conspired to defraud' their former client. The CEO of a record retention software company noted, 'Morgan Stanley is going to be a harbinger'."
of course the sys. admin. could have been told to lose the old email or just not retain it...
always mosh clockwise
Does this mean that if we want to sell a company a larger mass storage device all we have to do is deluge them with pertinant email with large attachments? How long would it take before they would be forced to upgrade?
Afterall the best way to drum up more business is with deceptive or dishonest tactics.
Like arts? Like cheesy little Indie mags? Check out www.artwerkmag.com, and don't laugh at the bad coding please.
I know that where I work there is a basic 6 month email retention policy, which states that all email will be deleted if it is 6 months old. I have always wondered if and when this will change.
There is probably an opportunity here for a company to come up with an extension to an email system which will manage keeping old emails. Something which will allow for the catagorizing of unstructured data. That way the system can trash the not to serious emails and keep the 'important' ones.
Ted Tschopp
Fantasy remains a human right; we make in our measure and in our derivative mode... -- JRR Tolkien
Even in a "third world" country I visited recently, they had emails dated 1997, stored on a Slackware box!
This time, I agree with the US justice system. They deserved it...I am sorry to say.
My old company did not back up email by design. That way if the company was sued, there was no endless searching through back up tapes for something possibly incriminating. When we had a legal dispute, the company lawyers would tell us all to search the email on our PC's for certain works and forward any hits to them.
(I work at a Bank) Since Sarbaines kicked in, we have to keep a backup of every single file you use for work purposes, not just email. This means archiving every word doc, spreadsheet, database...etc. Starting January 1, they also blocked our access to all external sources of email and external instant messaging clients as well. After seeing this judgement, now I understand why.
Not going to say which one but they only keep backups of email for 14 days! It's the responsibility of the partner to save email and back it up and the parter is the one that gets subpoena'd when the shit hits the fan.
This came out during a trial where MS appeared to partner with a software company on smartphones, and then terminated the agreement after seeing the technology. Shortly afterwards they announced their own product that had suspiciously similar features to the technology of the cut-out company.
"It's the height of ridiculousness to say for those 9 lines you get hundreds of millions."
i'm an it consultant at morgan stanley, and i haven't heard anyone talking about it around where i work (although that could be just the techies that i spend my time with not caring), and if you read more news stories on this, lots of people, not just inside morgan stanley, are pretty confident that the rulings will be overturned. and if you think the money's an issue, morgan stanley's profits were $4.5 billion last year, and in the first quarter of 2005, $1.5 billion. i'm not saying that this wouldn't be bad if it stands, or that morgan doesn't have any other problems, but the situation isn't as dire as a lot of people are making it out to be.
Aha! Maybe they aren't so innocent, and the email tends to reveal their real intentions and actions.
Point one: You can't make a lot of money by being completely and absolutely honest. Just how much a "lot" means is subject to debate. The original quote was $1 million, if I recall correctly, but that isn't so much money these days, so I think it would sound better with $1 billion.
Point two: I don't really blame them for going along with the modern trend. Look at the political leaders we have these days--and their popular support. I think Cheney is the No.1 poster child for corporate corruption. A few years of government "service", then he goes to Haliburton and rakes in the big bucks, then goes back to politics and starts an unnecessary war that "purely coincidentally" throws billions of dollars back to his old company--which is STILL paying him deferred compensation. However, he'll be back in business before the government has to try and pay the piper. If he lives so long, I'll have to count it as evidence against the existence of a just God. I really think a just God would have thoroughly smitten Cheney a good while ago.
You'll note that BushCo is also very eager to control their little secrets, and I'd bet they'd be delighted to erase all of their email, too. The next interesting question is whether or not they can do it, given the state of modern technology. How can they make sure someone hasn't burned a CD that contains the truth?
Freedom = (Meaningful - Coerced) Choice != (Speech | Beer^2), and sad sock puppets' bad mods avail them naught.
I wonder what would be the long term costs of keeping every piece of e-mail that is sent and received at a large financial organization like Morgan Stanley? To be useful in the context of an unknown future legal case, the e-mail would not only have to be backed up but also needs to be organized in some fashion. And it will accumulate over years. What happens if some piece of e-mail that is crucial to a case happened to be classified as junk? Does this mean that the company will have to keep every piece of junk mail received just in case?
A couple of companies I worked for lately had an ever increasing emphasis on cutting expenses in areas like manufacturing and R&D, but the expenses associated with trying to "look good" in reference to new legislation like the Sarbanes-Oxley act was virtually uncapped. According to the company Legal Counsel, if they have to go to court, showing that the company hired $1000/hr consultants to decide the record retention policy would be important. Apparently, what the company did nor did not do is not nearly as important as the company to be able to show that best effort along with the prevalent industry practice at the time was put in.
Simple, this administration has a policy not to use e-mail. No e-mail, no records. No records, no scandals.
Python
Lots of other things considered "hard evidence" don't meet those standards either. The threee big standards for rejecting evidence are:
irrelevant,
immaterial
violates rules against "hearsay"
Judges and courts are fine dealing with information that may or may not be true. They are set up to evaluate those sorts of things.
Almost certainly it was a corporate policy. My own company has had the lawyers pushing for a couple years no to have mandatory email deletion after only a few weeks, and the previous company did the same. Literally, no exceptions, they were going to force IT to auto-delete anything based on age, and the policy was going to be that if people needed to keep an email they should print it out and file it.
That pressure from the lawyers stopped not too long ago. I guess we have SOX to thank for that.
"email archiving requirements"
Do the requirements include archiving spam?
all the best,
drew
FreeMusicPush If you want to see more Free Music made, listen to Free
The basic requirement of brokerage firms is to supervise their brokers, and retain records of communication between their representatives and their customers. This has long meant that all written correspondence between a representative and a customer had to be reviewed by a supervisor, and retained for three years (and be readily accessible by regulators for the first year).
By the late '90s, e-mail was becoming common, there was no consistent approach to rule compliance, and the SEC had to decide once and for all whether an e-mail was more like a letter, or more like a phone call (which doesn't fall under the same retention and supervision requirements as written correspondence). They decided (much to the grief of the companies they regulate) it was more like a letter than like a phone call, so they established a rule, to be enforced by the NASD and the NYSE, that e-mail had to be treated like a written letter, subject to the same supervision and retention requirements. Soon after, they decided that instant messages were to be held to the same rules as e-mail (i.e., the same rules as a letter).
The NYSE and NASD then came up with specific rules as to how e-mail was to be supervised and retained. The electronic messaging system had to make a copy of each message on non-rewritable media, and the brokerage firms' compliance officers had to have the capability to review all messages and retrieve them for regulators upon demand. Vendors quickly came up with solutions to scan messages for suspicious words and phrases to flag them for review, and to pull up a random sampling so that supervision requirements could be satisfied without actually reading every single message. If a company blocks an inbound spam message before it hits their mail server, they strictly speaking never received it, so it doesn't constitute communication between a broker and customer and it doesn't have to be archived or reviewed.
Banks, and under Sarbannes Oxley all publicly traded corporations, now have similar rules, but in this case it was the SEC and NYSE rules that likely mattered. Often in these cases, saying what you do and doing what you say means almost as much as what you actually do, so the company was probably being punished as much for their prolonged inconsistency and failure to follow their own stated policies, as for their failure to produce any particular e-mail record.
A few years of government "service", then he goes to Haliburton and rakes in the big bucks
I hate to defend Dick Cheney, but saying he only has a few years of government service under his belt is flat-out false.
Exactly, if you dislike him because you think he just coasted or something you are completely missing the point. The scary part about him is that he has worked so hard to get all these connections that he is basically selling to the highest bidder.
Just because Cheney was faster to the trough doesn't make him less of a corrupt pig.
I notice you didn't touch the thorny issue of Cheney's continuing compensation from Haliburton, but I'll add another bit that really annoys me. When Cheney returned to government "service", Haliburton was so sorry to see him go that they gave him a special bonus. My recollection is that it was around $40 million. <sarcasm> Purely coincidental that Haliburton received so much government money under Cheney's watch.</sarcasm>
And no, I am not defending that book as a reliable source, though it's quite interesting in many ways. Actually, it's more of liar's clinic, with an amazing mix of truth, lies, self-contradictions, tautologies, propaganda, and just plain silliness. I plan to write an extensive review this weekend.
Freedom = (Meaningful - Coerced) Choice != (Speech | Beer^2), and sad sock puppets' bad mods avail them naught.
I hope this SOX-enforced change comes quickly -- then I can quit violating company policy ( because I'm auto-saving everything with a home-built scraper :-)
John
2) All broker/dealer voice conversations must be recorded for similar time periods. Some places record ALL conversations (including the mail room clerks, support staff, everyone) just to be sure. Watch what you say on the phone at work kids.
Does VOIP traffic get saved? Presuming VOIP isn't already used companywide, does anyone use VOIP at the office in an attempt to get around the "All voice conversations recorded" rule?
Tag lost or not installed.