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Sent to you by pakurilecz via Google Reader: International and Foreign
E-discovery & E-blackmail via Hack-igations by Ben Wright on 7/16/08
Non-US E-mail and IM Record Retention PolicyExecutive & Banker
(Financial Institution) Text and Instant MessagesInvestigations into
corporate scandals in France (Europe - EU) and Japan (Asia) illuminate
why employers need to retain employee electronic message archives. In
the Kerviel-Société Générale scandal and in the Livedoor scandal,
employee and executive e-mail and instant message (IM) records were
critical to the companies as the scandals unfolded.

Both scandals remind that electronic messages are a way of life for
modern professionals and executives. If an enterprise wishes to know
what its staff have been doing – and what commitments they have and
have not been making on behalf of the enterprise – it must keep records
of their messages. As blockbuster new technologies like the iPhone take
messaging outside the confines of traditional corporate IT
infrastructure, an enterprise must strive to capture records of
employees' business-related messages. An enterprise is wise to require
employees to use or copy an enterprise-controlled account on all
business messages so they can be archived centrally, outside the
control of individual employees.

Société Générale
A forged e-mail purporting to come from Deutsche Bank tipped big French
bank Société Générale (SoGen) that something was amiss with the
transactions of junior trader Jérôme Kerviel. As the bank came to
realize he had exposed it to 50 billion euros of potential trading
losses, it rushed to study all of his electronic messages in its
possession. According to the New York Times: "One top Société Générale
executive has told investigators that Mr. Kerviel rarely used his
office e-mail account, sending no more than 60 messages over the last
12 months. But the transcripts showed that he actively used instant
messaging."

In the exhaustive investigation that ensued, a key question was whether
Kerviel acted alone. The bank examined thousands of messages stored
from the bank's internal instant message system, including some between
Kerviel and a suspected accomplice, Moussa Bakir, an employee at Fimat
(Newedge). In one message that attracted particular scrutiny, Bakir
stated to Kerviel, "You have done nothing illegal in terms of the law."
And at least one e-mail hinted that an assistant inside the bank had
helped Kerviel.

Had the bank not been storing message records, its investigation and
remedial steps would have been hampered.

Livedoor
In the Livedoor scandal in Japan, rather than IM, the message records
were e-mail. Livedoor, a popular web portal in Japan, suffered an
accounting scandal that led to criminal prosecution for several
executives, including the CEO. Executive e-mail records figured
prominently in the investigation. For instance, e-mail records showed
that Livedoor executives deceived others by offering to purchase stock
the company already owned.

Although the scandal heaped infamy on the company, it did not bring an
end to Livedoor. As an entity separate from the individuals who serve
as executives, the company regrouped and pressed ahead as a viable
competitor in the Japanese Internet market. It installed a new CEO, who
said, "When you're a company with 2,000 staff and 200,000 shareholders,
people expect some corporate responsibility."

False Allegations
In the wake of Livedoor's highly-publicized scandal, a printout of an
e-mail circulated in Japanese politics purported to evidence an earlier
attempt by the firm's former CEO to use company funds to bribe top
Japanese politicians. The company conducted an internal investigation
of its records, and based on that investigation the new CEO was able
publicly and authoritatively to express skepticism that such a bribe
took place. In other words, the company's records enabled the new CEO
to deflect suspicion away from the company.

The bribe e-mail was later proven to be fake. The story shows another
incentive companies have to preserve their e-mail. Just as electronic
archives can inform an enterprise about its commitments, they can
protect it from false accusations and even e-blackmail.

Consider the U.S. e-blackmail case of Munshani v. Signal Lake.
Consultant Munshani claimed a Signal Lake executive promised him
valuable stock options. The stock options were not forthcoming, so
Munshani sued for breach of contract. To evidence his alleged contract
rights, Munshani introduced into court a printout of an e-mail from the
executive to Munshani. The words of the printout promised stock options.

However, Signal Lake said the printout was bogus! And fortunately for
Signal Lake, it retained all its incoming and outgoing e-mail records.
Drawing upon the services of a computer forensics expert, Signal Lake
was able to prove that Munshani was a fraud. By comparing Signal Lake's
extensive records with Munshani's record, the expert established that
Munshani had tampered with a genuine e-mail record, which said nothing
about stock options, and falsely changed it to promise stock options.
Signal Lake won the lawsuit, and the judge referred Munshani to the
local prosecutor for criminal investigation.

As voicemail comes to look more like text and e-mail (on account of
technology like unified communications), enterprises will want to save
more of it too.

–Benjamin Wright

Mr. Wright is an advisor to Messaging Architects, world leader in the
management of digital message archives.
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