Morgan Stanley proposes $15 million fine for email archiving errors

“With Morgan Stanley reported to be proposing that it pays a $15 million fine to the SEC for its failure to archive emails properly, there can be little scope to doubt the importance of email in legal, regulatory and compliance issues”, says Mark Donkersely Managing Director at records compliance management firm, AXS-One. “Although the proposed fine would apparently be the largest yet to the regulator relating to email, it is still relatively small compared with other SEC fines and, assuming this level of fine is accepted by the SEC, we can expect to see larger sums imposed in the future. "

“When you consider that email has now replaced letters, memos and reports as the principal method of conveying information (in business), this should take on a particular resonance for everyone in business. A study by AIIM International and Kahn Consulting indicated that 93 per cent of enterprises use email to respond to customer enquiries, 84 per cent for discussing strategy, 82 per cent for filing or responding to regulations and 71 per cent for negotiating contracts."

“This latest fine demonstrates why organisations (business excludes government which is clearly a target for us) need to tackle the issue of email archiving head on. While some organisations seem to be struggling to get to grips with exactly what is needed to ensure compliance, the technology is available to take the pain out of archiving. However, companies must take action before they bear the brunt of a courtroom or regulatory drama."

"An organisation with around 15,000 email-boxes will generate over 100 gigabytes a day in email alone. After one year of retention and factoring in index data and compression that’s easily 40-50 terabytes of data, equivalent to the amount of other records a similar-sized company might expect to generate in 10 or more years."

"Whilst this might seem insurmountable, thanks to today’s technology, a solution is very possible and comes at a small fraction of the cost of the negative judgment currently being levied against Morgan Stanley.”

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