Companies are starting to recognize the benefits that supervising electronic communications can have within an organization
NASD Conference, Los Angeles, CA and New York, NY (PRWEB) November 15, 2006
According to a recent survey on electronic message surveillance activities, reviewing email messages can yield valuable information and may significantly reduce a company’s exposure to risk. Of the 93 per cent of companies that have formal electronic communication retention and review policies, 63 per cent said that e-mail surveillance has improved their visibility into the risk the organization is exposed to as a result of employee communications.
The increase in visibility has resulted in 26 per cent of organizations terminating an employee as a result of information yielded through e-mail surveillance. The survey, conducted by Fortiva, a provider of secure, managed email archiving, and Jeffrey Plotkin, a securities enforcement specialist and partner with the law firm Pitney Hardin LLP, also found that as a result of email surveillance, 12 per cent of the companies uncovered customer complaints that were not previously escalated or disclosed. Fourteen per cent also said copies of employee correspondence were forwarded to a regulatory body or law enforcement agency.
According to the survey, companies are spending a median of 12 hours per week for every 100 employees to review 10 per cent of their electronic messages. This time investment is allowing companies to meet regulatory responsibilities and may help prevent lawsuits, harassment claims and exposure of confidential information. According to the results, while 83 per cent of organizations do not prohibit users from sending or receiving personal email, 79 per cent of businesses feel that it is deterring employees from engaging in correspondence that violates corporate policies and regulations.
“Although rules like NASD 3010 and NYSE 342 mandate supervisory review of electronic correspondence of registered representatives with the public, there really are no clear guidelines concerning how this review should be conducted,” said Jeffrey Plotkin, Partner, Pitney Hardin LLP in New York City. “Through this survey we hoped to shed some light on what the securities industry is currently doing to meet NASD and NYSE supervision requirements, thus enabling organizations to compare their electronic messaging surveillance activities to industry benchmarks. In the process, we learned that despite a lack of guidance, companies have been very proactive in making sure they meet regulatory requirements. The results also confirmed that supervision is giving organizations valuable visibility into their employees’ actions.”
Additional findings from the survey include:
- 64 per cent of respondents sample a percentage of electronic communications across all their employees, while 36 per cent only sample groups of users such as brokers, advisors or executives
- Sampling size varies, ranging from 1 - 50 per cent, with the median being 10 per cent
- 95 per cent of respondents said their sampling sizes have never been questioned by a regulator
- 83 per cent of companies do not exempt any group of employees from the review policy (such as the legal department, CEO, compliance department)
- All securities organizations surveyed are reviewing email messages, but 5 per cent don’t review the contents of the email attachments. In addition to email, 52 per cent review instant messages and 41 per cent review Bloomberg and Reuters Mail.
“Companies are starting to recognize the benefits that supervising electronic communications can have within an organization,” said Paul Chen, CEO, Fortiva. “The increasing sophistication of email archiving tools is enabling companies to improve their electronic communication systems and making it easier than ever for organizations to protect themselves from email risks.”
Survey results are based on 100 North American organizations that monitor and review the messages of their employees. The survey, conducted over a 4 week period from late October to early November, 2006, polled readers of leading securities industry publications that are responsible for the electronic messaging surveillance activities within their organizations as well as Fortiva customers. The survey was conducted by Fortiva, a provider of secure, managed email archiving, in conjunction with Jeffrey Plotkin, a securities enforcement expert and partner at Pitney Hardin LLP. A full report based on the survey results is available for download at http://www.fortiva.com/resources/reviewsurvey2006.html.
About Jeffrey Plotkin
Jeffrey Plotkin, a Partner of the law firm Pitney Hardin LLP in New York City, served for five years in the SEC’s New York Regional Office, where he was the Assistant Regional Administrator and chief attorney in the Division of Broker-Dealer Enforcement. Mr. Plotkin’s practice focuses on representing clients in investigations and enforcement actions by the SEC, NYSE, NASD, and New York State Attorney General’s Office. He also handles internal investigations for financial institutions, commercial litigation in federal and state court involving the securities and commodities industries, and arbitration and mediation of securities industry disputes. For further information, visit http://www.pitneyhardin.com or http://www.SECDefense.com.
About Fortiva Inc.
Fortiva is a leading provider of managed email archiving solutions for regulatory compliance, legal discovery and mailbox management. The Fortiva Archiving Suite automatically captures and indexes all electronic communications for redundant storage offsite. By outsourcing to Fortiva, customers can enforce a consistent message retention policy without having to worry about managing the storage infrastructure. Fortiva is the only email archiving service provider that guarantees search performance while offering total data privacy in a fully-managed solution.
Headquartered in Toronto, Canada with offices across the United States and a global data center presence, Fortiva delivers its customer-driven solutions through a strong network of strategic partnerships as well as a direct sales force. Fortiva is a privately-owned company, with investment from Cargill Ventures, McLean Watson Capital and Ventures West. For more information, visit http://www.fortiva.com.
For more information:
416.366.6666 ext. 385