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Deleting Emails Costs Morgan Stanley $1.45B

Posted by Zonk on from the that-was-important-and-i-forgot-it dept.

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'."

11 of 312 comments (clear)

  1. Oh crap! by TripMaster+Monkey · · Score: 5, Funny

    From TFS:

    The financial giant Morgan Stanley lost a $1.45 billion judgement yesterday due, in part, to their failure to retain old email.


    I'd sure hate to be the system administrator who dropped the ball there...

    "What do you mean we don't have them archived??? You just cost us 1.45 billion dollars!"
    "Don't worry though...you can pay it back....we'll just dock your paychecks by...say...$1000 per pay period. At that rate you can have it all paid back in a little over 55,769 YEARS!!!

    ^_^

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    ____

    ~ |rip/\/\aster /\/\onkey

    1. Re:Oh crap! by TheNumberSix · · Score: 5, Informative

      I freely admit I haven't RTFA, but I read some excellent coverage of this story on wsj.com.

      Apparently, Morgan Stanley came forward, said they had produced all the emails. (time passes) They find some more emails and turn them over. (time passes) The find a closet stuffed with backup tapes and turn them over. (Time passes) Morgan Stanley files a document certifying that they turned everything over. (Time passes) Morgan finds even more emails and turns them over. This causes the judge to get annoyed.

      One of the earlier problems was that Morgan had built a database to house old emails and the first time they were told to turnover emails, a sysadmin who was not in a clueful state just searched the database without finding out how much had already been imported into the DB. (Turned out the DB had only had a small percentage of old emails put into it.)

      --
      Never confuse feeling with thinking.
  2. Not really the best use of the "YRO" category by Rude+Turnip · · Score: 5, Insightful

    Big investment firms like Morgan Stanley are obligated by law to retain lots of records. This is more of an "Almighty Buck" type of story, IMO.

    --
    Bill Clinton: Pimp we can believe in. - The Shirt!!!
  3. I know how they feel by COMON$ · · Score: 5, Funny

    I deleted an e-mail that gave me $10 off at tigerdirect...dont think I will ever recover.

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    CS: It is all sink or swim...oh and did I mention there are sharks in that water?
  4. Deleting Emails Costs Morgan Stanley $1.45B by Anonymous Coward · · Score: 5, Funny

    Wow. I can delete mine for free.

  5. Sarbaines Oxley by Mentaljock · · Score: 5, Interesting

    (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.

  6. They deleted MY emails! by richardmilhousnixon · · Score: 5, Funny

    I was a client of MS/DW. I kept trying to let my financial advisor know about this wonderful pill that would make his penis bigger, and I get the feeling that MY emails were deleted as well!

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    -- sometimes AND gates turn me on.
  7. Selective Memory Loss by SoupIsGood+Food · · Score: 5, Insightful

    I think the issue is "selective memory loss" - Microsoft plays this card all the time in court. Emails from a relevant time period are "deleted" when convenient, while older or newer or even contemporaneous mail is saved... the judge in this case was simply smart enough to call shenanigans.

    You can delete old email if you're that hard up for space, just have a rock-solid deletion policy you can prove you adhered to in a court of law.

    It also helps to audit your archives and backups regularly, and document what data was lost when. 'Cuz face it, every admin at some point or other loses some data to corruption, hardware failure, bookeeping mixups or user error. Knowing what you forgot and when you forgot it can help in situations where not having the data on hand can cost a billion bucks or so.

    SoupIsGood Food

  8. Idiot by pyite69 · · Score: 5, Insightful

    where are my moderator points when I need them.

    Most companies purposefully choose short retention policies, in an attempt to avoid these kinds of settlements... it isn't a sysadmin's fault.

    The theory was that this would let them discard old emails without having it be intentional obstruction of justice. I guess that theory will be out the window now.

  9. Yes, but when the madmen are running the asylum... by shanen · · Score: 5, Interesting
    What actually strikes me as interesting about this is the battle for control of reality and truth. As you noted, many companies want to delete email quickly, but you ignore the question of why. If they are only doing good and honest things, then (you would think) they should be delighted to be able to conclusively prove their innocence. Yet they want to delete the email?

    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.
  10. Good....FINALLY! by PortHaven · · Score: 5, Insightful

    Think about it...

    If it can cost Morgan-Stanley $1.5 billion for not storing email. And 90% of email is SPAM. The risk of deleting/filtering SPAM and losing valid email is going to be too risky.

    Therefore, it will become extremely cost effective for Morgan-Stanley (and other large firms) to hire lobbyists to make unsolicited SPAM (with no valid return email addresses) illegal, criminal, and enforced.