Morgan Stanley Agrees to Pay $12.5 Million for Missing Email
Financial services organizations beware!
Failing to deliver email correspondence can result in heavy penalties and fines. Ask Morgan Stanley, who recently agreed to pay regulators $12.5 million to settle claims that it withheld emails from them after falsely claiming that the information was lost in the World Trade Center attacks on September 11, 2001.
According to an article in Portfolio.com, the Financial Industry Regulatory Authority said:
the brokerage “failed on numerous occasions” to produce emails sought for regulatory inquiries by claiming that the attack destroyed its email servers. In fact, Finra alleges, Morgan Stanley recovered millions of emails from back-up servers and individual computers at other locations, and subsequently destroyed many of them.
For more information on this “first of its kind” settlement, check out Finra’s press release. Consistent with most settlements, in paying the fine, Morgan Stanley neither admitted nor denied the charges.
As part of the settlement, Morgan Stanley is required to hire an independent consultant to counsel it on various compliance policies. something tells me they will be implementing an archiving system as part of this process.
