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Morgan Stanley in Trouble, With A Capital "E"
Back in May 2005, we reported on a major lawsuit by financiar Ronald Perelman against Morgan Stanley, which resulted in sanctions for e-discovery violations, and ultimately, a $1.57 billion award against the investment bank. And even though Morgan Stanley received some good news in that lawsuit, back in March, when a Florida appellate court overturned Perelman's award, the fallout from electronic discovery violations remains.
According to this article from the Daily Business Review (10/25/07), Morgan Stanley is facing hundreds of potential lawsuits for allegedly concealing evidence from clients who filed arbitration claims. Originally, Morgan Stanley claimed that its servers were destroyed in the 9-11 attacks on New York, which destroyed its e-mail records relating to the claims. But apparently, the allegedly lost files resurfaced during the Perelman case. Morgan Stanley recently agreed to pay $12.5 million in a regulatory proceeding with the Financial Industry Regulatory Authority for failing to disclose the e-mails. The penalty includes $9.5 million for a claimants' fund, which will result in payouts of $3,000 to $5,000 per claim. But lawyers for claimants say that this money doesn't adequately compensate their clients for their losses. Lawyers now intend to file new cases on behalf of claimants for spoliation of evidence and are gunning for punitive damages. One lawyer has obtained the URL, SueMorganStanley.com, which directs prospective clients to his law firm site.
Posted by Carolyn Elefant on October 25, 2007 at 03:40 PM | Permalink
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