Businesses Seek Solutions for Storing E-mail

Failing to retain e-mail records may cost Morgan Stanley $10 million.

The Securities and Exchange Commission is threatening to levy the fine because the Wall Street brokerage firm did not keep e-mails connected with a number of big cases the SEC is investigating, the Wall Street Journal reported.

The newspaper, citing people familiar with the matter, said that the firm, the SEC and other regulators met last week in Washington to discuss the document-retention problems. The SEC told Morgan Stanley that the fine could go even higher than $10 million, but the firm said it should be settled for less than $5 million.

A $10 million fine would be among the biggest ever levied on a brokerage firm for failing to retain documents, and the case highlights the risks involved in sloppy e-mail retention policies.

Companies are looking for ways to manage the task of when to save or destroy e-mails.

Public companies are required to retain documents and e-mails under the Sarbanes-Oxley Act. Health care companies have their own tough rules outlined in the Health Insurance Portability and Accountability Act (HIPPA). Even companies that are not regulated by the SEC or HIPPA are archiving all their e-mails in case they are sued.

One solution is being offered by Storage Technology Corp. and Deloitte Consulting LLP. A joint consulting service will be offered in the fourth quarter of this year through StorageTek's new Intelligent Archiving and Compliance Assessment (IACA) service.

Lee Dittmar, leader of Deloitte Consulting's enterprise governance practice, said in a press release that companies face a number of challenges in managing the entire process - from data creation to its destruction or permanent retention - while complying with regulations.

"We don't have any clients telling us, 'I've got my arms around it,'” Dittmar said. “It's mostly about people building bigger basements and throwing more stuff in them. I couldn't give you one company that's really doing it right.”

Another solution is being offered by a partnership between Fast Search & Transfer and IntelliReach Corp., which is designed to improve search capabilities of ItelliReach's e-mail management system.

"With the increased scrutiny and compliance issues associated with corporate email, messaging management for large enterprises is an escalating problem for which IntelliReach has a strong solution," said Ali I. Riaz, FAST's chief operating officer. "The ability to quickly search a company's messaging environment using multiple variables is extremely important to a modern corporation.”

Quickly retrieving e-mail messages is becoming increasingly important. Bank of America Corp.'s securities division last year agreed to pay a record $10 million to settle the SEC's allegations that it failed promptly to produce an e-mail exchange relating to issues that the firm's employees knew were under investigation.

You may like these other stories...

In need of CPE credits? Well, if you are an enrolled agent or CPA, you could earn as much as 18 credits by attending one of five IRS Nationwide Tax Forums this summer.The IRS Nationwide Tax Forums are three-day events that...
Russia races to dodge sanctions by adapting law to FATCARussia is in a race against the clock to adapt its laws to the Foreign Account Tax Compliance Act (FATCA) and save its banks from financial sanctions, Peter Hobson of...
The following list highlights 10 apps that that may be of interest to you, your clients, or your clients' clients. They were featured during a session of AWEBLive!, the 12-hour CPE marathon, and presented by Gregory L....

Upcoming CPE Webinars

Apr 24
In this session Excel expert David Ringstrom, CPA introduces you to a powerful but underutilized macro feature in Excel.
Apr 25
This material focuses on the principles of accounting for non-profit organizations' revenues. It will include discussions of revenue recognition for cash and non-cash contributions as well as other revenues commonly received by non-profit organizations.
Apr 30
During the second session of a four-part series on Individual Leadership, the focus will be on time management- a critical success factor for effective leadership. Each person has 24 hours of time to spend each day; the key is making wise investments and knowing what investments yield the greatest return.
May 1
This material focuses on the principles of accounting for non-profit organizations’ expenses. It will include discussions of functional expense categories, accounting for functional expenses and allocations of joint costs.