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Article by Mohan Babu

E-mails: The vital link

E-mails are now providing the vital link in corporate investigations. MOHAN BABU writes that laws in the United States are getting stricter about the use, content and storage of e-mails being sent and received by financial institutions

A recent article titled ‘Brokerage firms to pay total fines of $8.25 million’, caught my attention. The article talked about the use of e-mail in corporate America and went on to add that five broker-dealers would pay fines totaling $8.25 million for failing to retain e-mail communications in accordance with federal and securities-industry regulations. In the US, laws are getting extremely strict regarding the usage, content and storage of e-mails, particularly those being sent and received by financial institutions, including banks and brokerage houses.

E-mails and corporate communications have been in the news for a while now with the spate of (in)famous bankruptcies and ensuing investigations on “who said what, when, and how”. In a number of prominent cases, e-mails sent by ex-employees have acted as crucial pieces of evidence used by prosecutors. Under Securities and Exchange Commission (SEC) regulations, brokerage firms are required to preserve electronic communications relating to business for three years.

Communication to and from financial institutions in the US have long been regulated, and designed to protect investors and external parties dealing with them. Before the advent of e-mail, regular mail, phone calls and visits to brokerages had to be recorded, documented and stored. The advent of Internet and mail technologies has led to the ease of use and cheap communication and at the same time tightening of the regulations regarding the use and storage of such communication. Most large financial institutions have internal mail and electronic system usage policies designed to protect their interests.

A case in point is IT workers at financial institutions. Most of us working for IT departments in a wide spectrum of industries across the US are used to the unfettered convenience of Internet and e-mail. Although Internet usage is generally monitored, it is not explicitly prohibited so long as done within reasonable bounds. Of course, the definition of “reasonable bounds” varies from one organisation to another. However, for those working at financial houses, this “privilege” is non-existent. I was discussing this topic with a friend working for a multinational bank, who said that in his company, even scraps of paper on desks are a no-no. Employees are instructed to either shred unused documents or lock them while leaving office. Physical and system security is of great importance, therefore use of network is restricted to corporate Intranets and even incoming/outgoing mails are restricted.

As the economies across the globe get more integrated, even Indians dealing with international firms and organisations need to become aware of the restrictions on mail and international communications in global organisations. For example, Indian companies with consultants at American financial houses need to design alternative techniques to communicate with them during business hours. Outsourced projects from financial companies may face similar scrutiny. Of course, the flip side is that when Indian regulations change on the Internet and e-mail usage in financial houses becomes stricter, we will be prepared.





About the Author

  • A Bio and profile of the author, Mohan Babu, can be found at his homepage
  • Mohan has authored a book on Offshoring and Outsourcing (Publisher McGraw Hill, India), a link to which can be found here
  • Mohan has also authored an Online book on "Life in the US," available for free download.
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    For FAQ, Trivia and Information on Life in America, visit the Ask-A-Desi section

    ©Mohan Babu: All Rights Reserved 2005

    Mohan Babu is an international consultant trying to find the ‘sweet spot’ where IT meets business. E-mail: mohan He is also the author of a recent book on "Offshoring IT Services"

    All rights are reserved. Mohan Babu ("Author") hereby grants permission to use, copy and distribute this document for any NON-PROFIT purpose, provided that the article is used in its complete, UNMODIFIED form including both the above Copyright notice and this permission notice. Reproducing this article by any means, including (but not limited to) printing, copying existing prints, or publishing by electronic or other means, implies full agreement to the above non-profit-use clause. Exceptions to the above, such as including the article in a compendium to be sold for profit, are permitted only by EXPLICIT PRIOR WRITTEN CONSENT of Mohan Babu. 

    Disclaimer: This document represents the personal opinions of the Author, and does not necessarily represent the opinion of the Author's employer, nor anyone other than the Author. This Article was originally published in Express Computers


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