Electronic Data Records Law | How to Win E-Discovery

E-mail Records: Friend or Foe?

Electronic Mail Snippets Viewed in Context

For honest people, email records can often be their best defense.  Ask Matthew Tannin and Ralph Cioffi, former hedge fund managers for Bear Stearns.  Their detailed email records persuaded a criminal jury to acquit them.  That is, the jury could not find them guilty of fraud or dishonesty, as prosecutors alleged.

Thank goodness Bear Stearns did not follow the common legal advice to destroy email quickly.  Many lawyers recommend deleting email and text
messages quickly because they can provide adversaries scraps of conversation that can be misconstrued and taken out of context. 

Many lawyers and archivists recommend, for example, that email systems be configured to purge email, by default, after only 15 days or 30 days.  Such recommendations are always supplemented with the requirement that employees do something that is impractical – i.e. read all of their emails and promptly take affirmative action to keep those that are important records while allowing the others to be purged.  Experience shows that requirement is routinely ignored in practice because employees just don't have time to follow it.

In the Tannin-Cioffi case, prosecutors said the defendants were dishonest and lying to fund investors.  As evidence, the prosecutors pointed the jury to small passages clipped from emails.  In one e-mail, Tannin observed “simply no way for [the fund] to make money – ever.”  Prosecutors said this statement proved Tannin lied to investors because a few days later he expressed on a conference call his comfort with the fund’s prospects.  Amir Efrati and Peter Lattman, “U.S. Loses Bear Fraud Case,” Wall St. Journal, Nov. 11, 2009.

Some lawyers think juries are so dumb they will consider no more evidence than a few words from an email.

But in fact the Tannin-Cioffi jury considered a lot more.  It evaluated the context of that snippet of words.  It weighed the entire e-mail from which the snippet was clipped.  Amir Efrati, “Bear Loss Besets Prosecutors,” Wall St. Journal, Nov. 12, 2009.  Further, the jury considered many other emails between the men.  The jury noted for example that during the time that the prosecutors said the men had given up on the fund, their email records suggested they were working furiously hard to save it.  The jury focused on one e-mail exchange showing them working at 4 in the morning!

Notice how the detailed timestamp (metadata) on the email saved these alleged white collar criminals from jail.  Old fashioned paper letters did not record such a rich diary of business activities.  Here the electronic diary depicted the defendants doing the right thing. 

For good business people, lengthy, complete email and text message records -- including all the metadata -- are a friend.

The only people who have incentive to destroy their electronic message records quickly are mobsters, the Mafia.  They of course are motivated to toss all the smoking guns and dead bodies into the river.

Update:  Former AIG executive Joseph Cassano is also thankful for plentiful records.  Records saved him from criminal prosecution for allegedly hiding problems with AIG's mortgage-related investments in 2007.  Although prosecutors were on the verge of indicting him, notes taken by outside auditor PwC suggested that he had disclosed the problems.

–Benjamin Wright

Mr. Wright often serves as a public speaker on technology law for groups like CPA societies or Institute of Internal Auditors.  Here is an ARMA podcast describing Messaging Architects' work in e-mail archiving, including its workshop (led by Mr. Wright) for development of an email records policy in an enterprise.

EDD Search and Analysis

Advanced ESI Culling, Clustering and Concept Review

E-discovery search and analysis engines are proliferating.   Enhanced keyword search methods (such as fuzzy search that looks for forensic gems like misspelled keywords) are coming to recognize more nuances.  Other analytical technologies are emerging as well, and they are influencing the outcomes of audits, lawsuits and internal investigations.

Take the Lehman Brothers bankruptcy, which oversees 3.2 billion e-mail and instant message records. To glean value from this ocean of records, investigators and auditors need more than just conventional keyword search.  New methods include visual mapping of users, dates, transactions and relationships and searches for concepts like compensation rather than just words like “salary” or “bonus.” Telis Demos, "Smoking-Gun Search Engines Find Profit," Fortune, March 2, 2009, p. 24.

Savvy inspection of eDiscovery records can uncover hidden inference and meaning, and dramatically change the result of lawsuits and investigations.  For instance, the US Department of Justice indicted David Stockman, ex-CEO of Collins & Aikman, for alleged fraud, supporting its indictment with extensive factual references and analysis – including the report of an internal investigation conducted by a prestigious law firm on behalf of the company’s board of directors.  For Stockman, the outlook was grim; at a minimum he faced a grueling criminal trial.  

However, during the pre-trial litigation, Stockman’s defense team assiduously assembled a 15-million  (!) document database of e-mail and other records from the company.  From this huge corpus, the team drew out unexpected insights about how business actually transpired at the company and about how supplier rebates (a key topic) worked in the industry.  The insights suggested that neither DoJ nor the internal investigator really understood the case.  These insights enabled the defense to construct a radically different interpretation of Stockman’s tenure as CEO and, eventually, to persuade the DoJ that it had made a mistake.  In an unusual about-face, DoJ withdrew criminal charges against Stockman before the trial began.

In other words, ESI data-mining is the reason Stockman walks a free man today.

According to Ranjit Sarai, eDiscovery specialist at Messaging Architects, litigants like Stockman can achieve courtroom advantage by exposing e-mail databases to advanced or experimental search techniques. “When an investigator is trying to understand a multitude of e-mail records, scrub them for privacy compliance or cull out privileged communications, keyword-oriented searches can be very tedious and can mask the big picture.  Alternative analytical tools can often yield better results.  For example, they can visually map things like time relationships, which can highlight suspicious activities or contradict an adversary’s interpretation of what happened in the case.”

To assemble such as database, a litigant like Stockman would need to access to the records in a machine-processable format, such as XML.  Sometimes courts roughly refer to such as format as "native format," but eDiscovery formatting is a complex topic.

–Benjamin Wright

Mr. Wright is an advisor to messagingarchitects.com, experts in e-discovery services, training and software.   Here is an ARMA podcast describing Messaging Architects' work in e-mail archiving, including its workshop for development of an email records policy in an enterprise.