Morgan Stanley in Hot Water Over Emails. Again.

The New York Times reports today that the NASD has filed a complaint against Morgan Stanley, asserting that the bank “routinely fail[ed] to provide e-mail messages to aggrieved customers who had filed arbitration cases against the firm” over a 3 1/2 year period, and that Morgan Stanley further made “false claims that millions of e-mail messages in its possession had been lost in the Sept. 11 attack on the World Trade Center.” Perhaps most damning, the regulators have alleged that the firm regularly destroyed millions of emails. Read more below the fold. Without expressing an opinion on the merits of the NASD allegations – I am firmly agnostic on that point – Morgan Stanley’s history of problems in this area lends at least a whiff of credence to the NASD claims. Many probably remember the firm’s high profile dust up with Ronald Perleman, in which Morgan was subject to fairly severe sanctions as a consequence of its failure to timely turn over electronic records that it had earlier claimed had been destroyed. In light of the growing importance of electronic discovery, and especially in view of the significant changes to the Federal Rules of Civil Procedure (about which I will have more to say in a future post), there is simply no excuse for any entity, or individual, for that matter, who is involved in litigation to not have a form grasp on what electronic records are available, and for not properly preserving those records. If you think you are likely to become embroiled in litigation, consult your counsel post haste about what your obligations are in this area. In fact, I strongly recommend that you do so even before there is a threat of litigation. When, or if, that lawsuit ultimately comes, you’ll be happy that you did.