Morgan Stanley Settles Charges over 'Lost' E-mail

Lora Bentley

Morgan Stanley's recent trouble illustrates the importance of litigation readiness in terms of proper e-mail management. The New York Times reports the brokerage firm handed over $12.5 million recently to settle charges that it failed to turn over relevant e-mails in arbitration proceedings and falsely stated that they were lost in the Sept. 11 attacks.

 

Though the e-mails were presumed lost in the attacks because the company's New York e-mail servers were destroyed, the story says, the company later determined that they had been backed up on other servers or on individual PCs.

 

The settlement did not require Morgan Stanley to admit wrongdoing. As a representative from the Financial Industry Regulatory Authority told the Times:

We didn't find evidence that Morgan Stanley intended to hold back e-mails, but it was a case of one hand not knowing what the other was doing.

That is why it's not only important to have an e-mail management plan in place, but also to make sure the plan is implemented from the top down rather than on a departmental basis. And again, communicating that plan to middle management so that they understand where and how e-mail is archived and/or indexed is also key.



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