Morgan Stanley's Email Problem

Morgan Stanley has been fined $12.5 million for not providing emails. The Wall Street journal also notes that the company was also fined $15 million in 2005 for not providing emails. It doesn't note that Morgan Stanley was ordered to pay Ron Perelman $1.45 billion in 2005, ultimately because it was so bad at providing emails:

In an unusual ruling in March, the judge hearing the case, Elizabeth T. Maass, ordered the jury to take as granted that Morgan Stanley and Sunbeam acted together in the fraud, because of what she called obstructionist behavior on the part of Morgan Stanley, who she claimed was holding back e-mail evidence.

Interestingly, a large part of Morgan Stanley losing that case (which later rose to $1.57 billion but which was ultimately overturned on appeal, although it's still being litigated) was that the company fired its lawyers, Kirkland & Ellis, just before the trial began – and then wouldn't tell the judge why, leading the judge to refuse a motion giving the bank's new lawyers more time to prepare their case.

Something to ponder, next time you wonder whether you should fire your lawyer. I wonder, what are the odds that by now Morgan Stanley has finally got its email act in order? It's weird: when I started writing about banks and the internet back in 1995, Morgan Stanley was very much ahead of the curve, both in terms of investment ideas and in terms of its own IT expenditure. I wonder what happened.