e-mail which cost $10 million

Morgan Stanley faces $10m fine for failing to keep e-mail - WSJ

The Securities and Exchange Commission is threatening to fine Morgan Stanley over $10 million for allegedly violating record-keeping rules by failing to retain e-mail messages, according to a report by the Wall Street Journal.

Citing people familiar with the matter, the WSJ says the regulator could fine Morgan Stanley more than $10 million for failing to keep e-mail that may have been relevant to a number of cases brought against the bank in recent years.


The fine would be one of the biggest penalties ever paid by a brokerage for failing to retain records. In March 2004, Bank of America's securities division agreed to pay a $10 million penalty for failing to produce an e-mail exchange relating to an investigation.


According to the report, the SEC has been building its case against Morgan Stanley for some time but a final decision on a fine could take months as the two sides continue to negotiate and haggle over issues.


The WSJ says the bank met with regulators from the SEC and other agencies to discuss the matter. In January the bank was rumoured to have been told it could face a $10m fine over the matter, but at the recent meeting the SEC told Morgan Stanley executives that it has continued to uncover problems and the fine could go higher.

- Finextra, 2 Sep 2005.