Morgan Stanley fined for faking lost emails due to September 11
Morgan Stanley will pay a $12.5 million fine to settle claims that the company improperly withheld emails in arbitration cases by saying that they were lost in the September 11 attacks. 12 of the company’s email servers in New York were destroyed in the attacks, but data was also stored on networks and personal computers throughout the company too. Claims that all emails were lost on September 11 were therefore untrue.
The Financial Regulatory Authority issued a statement last week, indicating that a Morgan Stanley subsidiary failed to produce emails for plaintiffs and regulators. The company was sanctioned twice in the past for “mishandling” emails, and last year paid $15 million to settle a Securities and Exchange Commission matter regarding deficient email preservation.
A Morgan Stanley spokesperson says that the company didn’t withhold emails intentionally, and that they notified regulators as soon as the emails were found. And as often happens with such settlements, Morgan Stanley doesn’t admit or deny wrongdoing.
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