Morgan Stanley fumbles e-disclosure, gets hammered

Ouch! This story from yesterday’s Wall Street Journal details how problems with Morgan Stanley’s e-discovery process are going to end up costing them a lot: perhaps $360 million, or even more. The judge in the case labeled their actions as bad faith, and that’s going to cost them.

Morgan Stanley is in serious trouble because of the way it mishandled an increasingly critical matter for companies: handing over email and other documents in legal battles. Lawsuits these days require companies to comb through electronic archives and are sometimes won or lost based on how the litigants perform these tasks. Morgan Stanley kept uncovering new backup tapes, couldn’t perform full searches because of technology glitches and gave material to the other side that was sometimes incomplete or late.

The Morgan Stanley folks made a number of poor decisions and mistakes– ones that you should be sure not to duplicate in your own environment.

Update: this WSJ story says that the jury hit Morgan Stanley for $604 million. As the story also points out, the jury was instructed by the judge to put the burden of proof on Morgan Stanley, not the other way around, so it’s reasonable to expect that this will be appealed, and that it might be overturned. Still, $604 million is a high price tag.

Update: the WSJ just reported that the jury awarded Perelman another $850 million in punitive damages. That brings Morgan Stanley’s total tab to $1.45 billion.

Comments Off on Morgan Stanley fumbles e-disclosure, gets hammered

Filed under FAIL, Oops!

Comments are closed.