Just Another Reason to Pay Your IT Department Well

Monday, May 16, 2005
Morgan Stanley is in big trouble. In a lawsuit filed by Ron Perelman, Morgan Stanley is accused of defrauding Mr. Perelman. Morgan Stanley was ordered by the court to produce a slew of e-mails. An executive at Morgan Stanley signed an affidavit stating that all documents had been turned over. But then backup tapes continued to pop up, many contained critical e-mails. As more and more tapes were found, 1600 in all, the judge ruled that Morgan Stanley was deliberately acting in bad faith and in an unprecedented legal move, ordered the jury to just assume that Morgan Stanley had indeed helped to defraud Mr Perelman.

Mr Perelman had earlier offered to settle for $20 million. Morgan Stanley rejected the offer. He then sued for $2.7 Billion dollars. That is a VERY big difference and Morgan Stanley looks almost certain to lose, albeit probably not for $2.7 Billion.

Morgan Stanley blames the problem on technical glitches and their inability to perform full searches and provide complete and accurate data. IT is one of those things that you don't really think of until something goes wrong, and then it REALLY goes wrong; sometimes to the tune of $2.7 Billion.

1 comments:

Amanda said...

The news is in - Morgan Stanley has to pay 600 million. Bet they're kicking themselves about not settling for twenty, now.