The SEC's E-mail Crackdown

Broker-dealers say vague wording in SEC rule 17a-4 will make compliance with the rule unnecessarily costly and burdensome.

Last December, when five US broker-dealers—Deutsche Bank, Goldman Sachs, Morgan Stanley, Salomon Smith Barney and US Bancorp Piper Jaffray—agreed to pay fines totalling $8.25 million ($1.65 million each) for failing to preserve e-mail communications, it became clear just how disorganized broker-dealers have been in retaining e-mail records.

In the course of their investigations, the regulators found a whole host of problems. Some of the firms hadn’t kept e-mail records for the required three

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