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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'."
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.
(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.
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.