Costly lawsuits like the recent Enron-related settlements made by two of Canada’s five big banks are one of the main drivers behind a Toronto-based financial firm’s recent decision to implement a hosted e-mail archiving and compliance solution.
First Associates Investments Inc., along with two other financial institutions, recently rolled out an e-mail archiving and compliance solution from Toronto-based e-mail archiving provider Fortiva Inc., which has 10 customers in the financial sector. These also include GMP Securities and Research Capital.
The broker dealer has currently migrated half of its 650 employees to the Fortiva Archiving and Compliance Suite and expects to have the project completed by the end of next month. Fortiva, which stores one million-plus of its customers’ e-mails at its Toronto data centre — it also has another site in Houston — said users can access this information in seconds rather than hours. An appliance that sits at the customer’s site integrates with their existing infrastructure and encrypts all e-mail before leaving the premise. Customers can access the data via a Web browser interface using a user ID and password to search the data centre.
“It makes it a lot easier for the business to search the data,” said First Associates information security officer Brian Erdelyi, adding that First Associates sends and receives between 500,000 to 700,000 messages per month. “We can delegate some of that to human resources and legal departments.”
Erdelyi added the compliance department will be monitoring and supervising how e-mail is being used across the organization while legal will be able to recover messages.
Next to litigation, regulatory requirements and e-mail storage are also increasingly forcing organizations like First Associates to re-think their e-mail policies. For example, recent amendments to the Investment Dealers Association of Canada bylaw 29.7 require securities firms to retain e-mail communications pertaining to advertising, sales and related documents for a period of five years from the date of creation.
“Part of the issue is when companies don’t have a proper e-mail archiving solution in place, a lot of the time they decide it’s easier to settle than to go through backup to find the relevant e-mail,” said Fortiva Inc. CEO Paul Chen. “A lot of litigation lawyers are taking advantage of the situation right now.”
To avoid hefty payouts, Erdelyi said organizations need an archiving solution that will enable them to search and obtain the data in a fast and efficient manner.
“There are times when we have to recover messages for litigation purposes,” said Erdelyi. “If somebody requires information, we want to be able to provide it quickly and dispute any allegations of wrongdoing.”
In addition to defining the length of time a company should retain correspondence, Chen said organizations’ policies should also set out protocols for using and controlling access to e-mails.
“The policies should also define what is an acceptable use of an e-mail infrastructure to employees,” said Chen. “They should also define a supervision policy to allow what is the proper use and retention of e-mail.”
Aside from storing and accessing e-mail, Erdelyi said First Associates is also looking at using search capabilities for business continuity purposes like recovering old messages that are not part of its backup strategy and to reduce the amount of e-mails stored on employees’ desktops by allowing employees to search their archived e-mails.
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