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Archive for September 28th, 2007

Morgan Stanley punished for withholding e-mails

Posted by rjbiii on September 28, 2007

[HT: Information Governance Engangement Area]

Information Week reports that the Financial Industry Regulatory Authority has fined the financial services firm $12.5 million dollars:

Morgan Stanley on numerous occasions failed to provide e-mails requested by claimants in arbitration proceedings and regulators, FINRA said.

The financial firm previously had stated that its e-mail servers were destroyed in the 9/11 attacks, resulting in the loss of e-mails archived prior to that date. Morgan Stanley presumably had lost millions of pre-9/11 e-mails, but it was later discovered that they had been restored to the firm’s active e-mail system using backup tapes, which were stored in another location.

Additionally, FINRA found that Morgan Stanley destroyed many of the pre-9/11 e-mails in its possession by overwriting backup tapes that stored e-mail from 11 of its 12 servers and by allowing users to permanently delete e-mail.

In this case, the misbehavior during discovery occurred during arbitration and regulatory proceedings, rather than federal or state court cases. In such proceedings, it might be tempting to try to circumvent “normal” discovery obligations by agreeing to a more relaxed regiment. This might mean a less expensive process, but might not lead to a “just” resolution of the matter.

Posted in Arbitrations, Articles, Regulatory Proceedings, Sanctions | Tagged: | Leave a Comment »

 
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