07 November 2003

The Check's in the Mail

Bank Systems & Technology > The Check's in the Mail > November 4, 2003:

Ivy Schmerken

Concerns over compliance with e-mail-retention rules dominated a recent discussion moderated by Wall Street & Technology at InformationWeek's annual technology conference in Tuscon, Ariz.

One of the major challenges facing the securities industry is not only storage of all electronic records -- including e-mails and instant messages -- but being able to access the material in the event of an investigation. 'Retention without accessibility is not retention,' warns Jay Cohen, vice president and chief corporate compliance officer of The MONY Group, a diversified financial services firm that owns Advest, a retail-brokerage firm.

Another lesson learned by financial services firms is that backup is not retention. Cohen, a former prosecutor, cited a recent case involving the research investigation of five major securities firms fined by the National Association of Securities Dealers $1.65 million apiece. Although the firms had stored e-mails on backup tapes for several years, they were fined because they were unable to retrieve the e-mails according to the rule's requirements.

In the course of regulatory review or litigation, firms must be able to 'access what the regulators are looking for,' and companies that don't have that ability will be in a difficult situation, Cohen says."

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