Six investment banks, including Wall Street firms Goldman Sachs
and Merrill Lynch, have been warned by US securities regulators
that they may have to pay up to $10 million as penalties for not
keeping e-mail messages as required, according to a report by the
New York Times.
It appears that the fines were proposed in a meeting of
Securities Exchange, NASD, and New York Stock Exchange officials on
Tuesday. The fines would be part of a settlement of inquiries into
the disposal of e-mail messages.
Under US regulations, such firms are required to retain all
business communications they have sent, both internally and
externally, for three years. These data must be kept in an easily
accessible place for at least two years. According to the
regulators, the firms failed to comply with these rules.
The regulators made the discovery while investigating possible
links between the investment banking business of the firms and the
investment recommendations of their stock analysts. The banks
failed to produce requested documents related to the procedures for
rating companies and evaluating and paying analysts.
The list of the firms also includes the Salomon Smith Barney
unit of Citigroup, Morgan Stanley, Deutsche Bank and US Bancorp
Piper Jaffrey.
