Yet another company that failed to maintain its corporate archive properly has been exposed. Merrill Lynch has been fined $2.5 million for violating regulations governing the storage of e-mails.
The U.S. Securities Exchange Commission (SEC) fined the brokerage firm Merrill Lynch $2.5 million for failing to store it electronic correspondence correctly.
Merrill Lynch has maintained a policy of silence over the issue. It neither agreed or refuted the charges made by the SEC, though it is known that the firm has agreed to pay the fine. The regulatory body has also warned the firm that if the violations are repeated, the corresponding fines will be much larger.
The SEC stated that the violations occurred in the period between October 2003 and February 2005. Under current rules, brokerage firms are supposed to store e-mails for at least three years. Analysis of a company's mail archives is one of the instruments used by the SEC when carrying out investigations.
A Merrill Lynch spokesman has since stated that the storage system and the archive of electronic messages has been improved and now fully complies with all the current regulations.
In a similar incident last month the SEC fined the third largest broker on Wall Street, Morgan Stanley. The company also violated the rules of storing electronic mail, but had to pay $15 million. That fine is the largest ever imposed on a company for failing to comply with regulations on the storage and archiving of e-mails.
"Both companies have suffered multi-million-dollar losses which could easily have been avoided using products that cost in the region of a few dozen thousand dollars. Of course its annoying when thoughtlessness costs a company so much," comments Denis Zenkin, marketing director at InfoWatch.
Source: IT Compliance Institute
