Email is Permanent

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Matthew Tanin, a fund manager at Bear Stearns, is learning an important lesson about email: It is, for all practical purposes, permanent.

It is easy to think of email as a conversation. You say something and get a reply back and both parties hit delete and it is gone. However, in reality, much of the email you send is stored permanently somewhere–especially when you are dealing with corporate mail servers. If you send a message out, it will go into your sent items and will usually be backed up on your local mail server. Even if you delete the email from your sent items, it is likely to be merely “flagged” for deletion and still backed up.

When it gets to the other end, it is probably going to be backed up by your recipient’s IT department. In large organizations it may be backed up in a few more places along the way.

It is now standard practice to subpoena email records as part of a court case. This is what is happening to Mr. Tanin. He emailed someone saying that certain bonds were “toast”, but at an investor meeting, he told people he was “comfortable” with the investments.

Other money managers have had similar problems. Here are some of the emails that have turned up in court cases:

I can’t believe what a piece of sh– that thing is

–Henrey Blodget from Merril Lynch

Henry was referring to a company to which he inexplicably gave a “buy” rating.

Jack Grubman referred to executives at a company as “pigs” and then encouraged investors to buy stock in the company without mentioning the barnyard leadership team.

It isn’t just email that can turn up. The text messages from SkyTel were subpoenaed for Detroit’s mayor and led to the revelation that he was having an embarrassing affair which he had denied under oath.

In many cases emails and other forms of electronic communication are even more permanent than something written out on paper because of the multiple points of backup. If you are dealing with something that could come back to bite you later, pick up the phone, or better yet, go talk in person, but avoid email.

This advice isn’t meant to tell you how to hide things that are illegal. There are many email conversations that are perfectly legal that you still wouldn’t want to have showing up in a courtroom or made public.