4:00 PM -- Anybody who wonders why email archiving is such a hot topic today only needs to look at Wall Street securities firm Morgan Stanley (see Archiving Misunderstood , Email Archives Arrive, and Outsourcers Beef Up Email Archives).
The Wall Street Journal today reports that the Securities and Exchange Commission (SEC) is threatening Morgan Stanley with more than $10 million in fines for failing to retain email relevant to recent investigations. That tells you how serious the SEC is about enforcing its laws on email retention, including the mandate to produce those documents in a timely fashion.
Morgan Stanley has been in trouble before over email retention policies, dating to 2002 when it was among a group of firms fined $1.65 million apiece for failing to hold onto documents. Earlier this year, the firm was ordered to pay financier Ronald Perelman $1.57 billion in a lawsuit that focused on its inability to produce documents. (Morgan Stanley is appealing).
According to the Journal, the SEC feels Morgan Stanley hasnt live up to its promise of correcting systemic problems that led to the 2002 fine. For its part, Morgan Stanley says it has made great efforts to improve its email retention systems and did not intentionally destroy or overwrite email it was supposed to keep.
In any case, email archiving vendors are sure to use this news as a selling point -- the same way disk backup vendors use stories of lost tapes (see IDC: Triple-Play Drives Ethernet and Diskers Enjoying Tape Woes).