Morgan Stanley Fine Reflects that E-mail is a Business Record

Yesterday, Morgan Stanley issued a press release offering up a fine of $15 million to resolve an investigation over its failure to retain e-mail messages. The same firm earlier in 2005 received a court judgement against it (where missing e-mail messages was a key contributing factor) for $1.58 billion and is currently also facing other "related" charges with NASD.

This announcement and others like it are significant and provide business leaders of all sizes and types with some critical warnings. Namely, that a policy of automatic deletion of e-mail messages is a dangerous one because it could be tantamount to willful destruction of business records, and that the cost of recovering e-mail messages must be attrociously high (if the message do in fact still exist) for Morgan Stanley to offer up such a huge penalty.

But, most important of all in my opinion is that judgements like these are establishing a new watermark level of best practices for e-mail record retention, a benchmark that global business leaders must adhere. Since so much business is now conducted by electronic communication and because it is difficult, if not impossible, to distinguish messages that have business-record-value from those that don't, it is becoming clear that proper governance will include retention of all e-mail messages for longer periods than has previously been the case - possibly indefinately.

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