Deleting Emails Costs Morgan Stanley $1.45B

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'."

Not really the best use of the "YRO" category

[Rude Turnip]

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.

Re:Oh crap!

[Anonymous Coward]

It's nice to see that now such policies might cost a company bigtime.

Why?

Rention policy wouldn't make a difference

[downsize]

ok being serious (no more shinyfeet plugs), I used to work as an admin where the retention policy was 1 year. however, that just meant you rotated the tapes for 1 year. the email growth rate was very small (even though there was 1,000s each day), it was the files that grew beyond the retention. even the attachments and email boxes with 1+GB were safe, as 20 years of email fit onto a single DLT4.

granted, MS, er Morgan Stanley is a much bigger company, but I find it very hard to believe that any retention policy would include email, that has got to be their smallest backup.

Conspiracy Theorist

[Eberlin]

A government entity sends out an all-staff e-mail saying that in order to conserve space, we are to clean out our e-mail. Trash bin should be cleared out, important documents are to be printed out, filed, and then deleted off the system.

I've always thought that storage was cheap nowadays and that clearing out e-mail boxes was moot. I suppose there's some merit to it as there's definitely space to be reclaimed from the activity...but is it really worth that much considering a couple of hundred bucks would get you another 200GB or so?

Conspiracy theory, anyone? :)

Selective Memory Loss

[SoupIsGood Food]

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

Idiot

[pyite69]

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.

Re:Not really the best use of the "YRO" category

[Surt]

There are similar laws here. Are emails financial records?

Not the sys admin

[Synn]

2 months ago I was in a tech presentation meeting where there was company promoting their email retention software(sat between the world and the email host, saving all the emails that went through in a read only state). It was specifically aimed at recovery for just this sort of investigation.

The problem wasn't the sys admins, they all saw the need for it, the road block is convincing these companies to buy the needed systems.

Time Study Analysis on the Cubicle Slaves

[Cryofan]

Yep, it's like the olden days, now that they have essentially busted the unions. We are headed back to the bad old days of time study, 16 hr days, 6 day weeks, etc.

Pretty soon if you get a bad mark on your time study, you will be up for 39 lashes.

Over in Europe, meanwhile, they work 20% less year than we do.

Re:Email retention Policy.

[Anonymous Coward]

That way the system can trash the not to serious emails and keep the 'important' ones.

Pffft, why make it complicated? E-mail just doesn't take up that much space. Well, maybe those internal mails with people mailing 100 MB attachements around. However, it's easy to setup a system that only keeps one copy of all attachments sent.

Just like how Google can offer 2 GB e-mail space. Does anyone actually use all that? I would say the average person only uses a fraction.

I have every (non-junk) mail I have sent or received for at least the last 10 years (including a ton of inter-office business mail) and I barely have 2 GB. Compressed it's way less than that.

Just store it all, no biggie. People waste way more space on their personal network drives (WAY more space).

IANAL - Someone help me understand this.

[tshak]

Can someone with more legal understanding than myself please explain why emails can be considered as hard evidence?

1) They can't be authenticated: There's no way to prove if the email was written by the person on record.

2) The contents can not be validated: There's no way to prove that the contents were not altered in transit.

To me, email is so easy to spoof that I would take anything I got from such "evidence" with a huge proverbial bucket of salt. Furthermore, I know that institutions such as Morgan Stanley are required to keep certain records on hand but considering the fragile nature of email I find it quite odd that companies would be required to keep it around. Do IM conversations fall into the same category?

Call me ignorant (I am), but this issue really confuses me. It's not like Morgan Stanly destroyed a bunch of notorized documents.

Re:Time Study Analysis on the Cubicle Slaves

[mpost4]

Over in Europe, meanwhile, they work 20% less year than we do.

And have what, 20% unemployment rate? No thanks, I'd rather work 20% more then not at all.

Good....FINALLY!

[PortHaven]

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.

Re:Yes, but when the madmen are running the asylum

[jbolden]

Bush is the first president to routinely destroy large quantities of documents. So he can get away with it. The fact is the president can pretty much get away with anything when the opposition party is filled with wimps and his own party is in favor of his acts.

There's also speed to consider.

[khasim]

Disk space is cheap.

But having the email program dig through years and years and years of email just to get the stuff you received today pisses a lot of people off.

The issue isn't really about disk storage. The issue is that many mail systems are not setup with "live" data disks and "archived" data disks. Everything goes on the live drives unless the user archives it off to a safe location.

But then how do you make sure you have a backup of that archived data?

Currently, we're taking the approach of copying all the email that comes in or goes out to DVD.

It's not a great solution, but the users can do whatever they want with their emails and I'll still have a copy in case any legal issues pop up.

I suspect that, very soon, email systems will be designed to accomodate the concept of archives as a near-line storage system or even a different storage box. Adding space to a storage box probably won't have the same issues as adding space to a live mail system.

And having a system that archives email to a different box after a set time since last access or something would definately improve the speed.

Re:i don't get it

[SGGent]

Well to all of us nerds we know that email is not so reliable but it's still evidence. The trial is where you argue those points. Look at any case where evidence gets thrown out because of of validity. But it is still discovered. And many times discovery is enough to make someone settle. "I'll settle/pay/plead guity so I won't embarrass myself"

Re:They should learn from Microsoft

[kfg]

And why shouldn't they? Are you required to keep every piece of paper that ever goes through your hands, or every email that might pass through your inbox, because someday you might violate some law and be prosecuted for it?

You aren't required to tie your own noose, and there are even provisions to assume you are innocent until found guilty/liable and Morgan Stanley is being found liable for behavior after the suit was filed, which changes the rules.

Certainly you are required to retain some records for legal purposes, but they all also have an expiration date for that legal requirement.

In the not too distant future that legal requirement for business email will be three years, at which point you'd have to be an idiot not to just delete it all.

Even Microsoft has legal rights in this country, and any right you deny to them you simply deny to yourself. Beware of the emotional response.

KFG

What I think really happened

[jbolden]

For a large business knowing all the places something might be backed up and how the servers connect to one another requires a great deal of institutional knowledge. Even knowing how to find this sort of thing out requires institutional knowledge and time. Which is to say an experienced system's analyst with the time necessary to do this project and lots of other expert system admins, network admins, etc... for him to talk to.

This is exactly the kind of "fat" that Morgan Stanley and other companies got rid of 4 years ago. They couldn't answer the question because they no longer understand their email system because they fired everybody who had the broad and deep knowledge. They no longer have people on staff who have the experience in doing this sort of research and they don't have the other kinds of experts available to do it in reasonable time.

But they would much rather pay the fine than admit this under oath.

Re:Yes, but when the madmen are running the asylum

[Moofie]

"You can't make a lot of money by being completely and absolutely honest."

Then you shouldn't make a lot of money. The end does not justify the means.

Re:Yes, but when the madmen are running the asylum

[iminplaya]

What opposition party? There is none. What opposition there is amounts to no more than one percent. And you're sure not going to see any kind of "opposition" from the democrats since they feed from the same trough. The real opposition is doing what it can, but until they get some votes, it will be business as ususal. Bush's boys just learned the lesson from Nixon..."Burn the tapes!"

Re:Good....FINALLY!

[Anonymous Coward]

Enforced? Are you ready to march off to Nigeria to "enforce" this?

Re:Yes, but when the madmen are running the asylum

[Anonymous Coward]

In Watergate, the documents were destroyed and the tapes edited after the break in was discovered and pointed to the White House. This administration is destroying documents proactively. He's correct.

Re:Yes, but when the madmen are running the asylum

[jbolden]

Large quantities. Presidents destroying a file or two is not unusual at all.

Re:Yes, but when the madmen are running the asylum

[snilloc]

--which is STILL paying him deferred compensation.

Which is totally irrelevant because he gets deferred compensation whether he does them favors or tells them to stick a large object in a small orifice.

GWB doesn't email (for record-retention reasons discussed), and iirc Condi doesn't email too much either. Powell was a big emailer, and Karl Rove is too.

All companies large and small, and virutally all individuals in their private lives, have done illegal things of all sorts of magnitudes. Ever mow somebody's lawn for $20 and not reported it on your 1040? Tax evader! Ever download Metallica? Copyright infringer!

Now, I'm sure you're a complete angel and have never done anything even remotely illegal, but would you want every email you ever sent subject to court review?

And while we're playing conspiracy theorist and talking about cover-ups, let's talk about Vince Foster...