Failure to archive e-mail can be costly
As firms learn the hard way that e-documentation must be kept, they are trying out programs that will help them comply with the rules
WHAT IS THE price of failing to archive e-mail? For United States investment bank Morgan Stanley, the answer runs into the millions.
The Wall Street firm announced last month that it had reached 'an agreement in principle' with the United States Securities and Exchange Commission to pay a record fine of US$15 million to resolve an investigation into its failure to archive e-mail properly.
That sum may not amount to more than loose change or a few fat bonus cheques for the third-largest US securities firm (net revenue US$27 billion last year), but as the biggest penalty meted out for misbehaviour with e-mail archives, the case highlights how important electronic documentation has become in the modern court of law.
'Across markets and sectors in Hong Kong and around the world, the need for corporate compliance with regulations, such as Sarbanes-Oxley and Basel II, is accelerating,' said Victor Law, Enterprise Vault product manager, Greater China Region, Symantec.
'How companies address these issues can have a material impact on corporate performance.'
Technology research firm Gartner estimated that a Fortune 500 company typically had 125 active legal matters to attend to at any one time, 70 per cent of which would involve e-mail.
In the US, the ePolicy Institute conducted a survey on workplace e-mail in 2004 involving 840 American companies.
The institute noted that 21 per cent of respondents had e-mail and instant messaging subpoenaed in the course of lawsuit or regulatory investigation, an increase of 14 per cent over the 2003 results.
But the use of electronic documents as evidence is not a recent phenomenon, and there is a catalogue of failures by big corporations to meet e-mail retention regulations stretching back a decade in the United States.
Mark Levitt, research vice- president, Collaborative Computing at IDC, said: 'Basic e-mail archiving functionality will become increasingly available in messaging and storage applications. However, many organisations will continue to purchase dedicated solutions that provide a better fit for compliance and corporate governance requirements, and integration with existing infrastructure.'
Mr Law said: 'Our solution [Symantec Veritas Enterprise Vault e-mail archiving application] helps enterprises manage e-mail, which allows enterprise-scale review of e-mail, instant messages, Bloomberg and digital fax messages.
'It also provides the framework to select and sample target e-mail, manage its review by appropriate reviewers and record the entire process for audit purposes, thereby dramatically decreasing the cost and effort of e-mail supervision, review and compliance demonstration,' Mr Law said.
Beyond e-mail archiving systems, the ePolicy Institute's workplace e-mail survey suggested that a key challenge for firms looking to meet compliance was educating employees about e-mail and instant messaging retention rules.
The report said 37 per cent of respondents did not know or were unsure about the difference between an electronic business record that must be retained and an insignificant message that could be deleted.
'The report said 37 per cent of respondents did not know or were unsure about the difference between an electronic business record that must be retained and an insignificant message that may be deleted'
