[PEN-L:32785] applied cost benefit analysis

[Michael Perelman <michael@xxxxxxxxxxxxxxxxx>]

Note that they pay modest fines compared to what revealing the
information might cost.  Very intelligent economic behavior.

FIRMS FINED FOR NOT FOLLOWING E-MAIL RETENTION SCHEDULE
The Securities and Exchange Commission has fined five major brokerage
firms
(Deutsche Bank, Goldman Sachs, Morgan Stanley, Salomon Smith Barney, and

U.S. Bancorp Piper Jaffray) $1.65 million each for failing to keep
employee
e-mail for the required retention period. The SEC examines such mail to
find cases in which brokers have rated stocks positively and given it a
"buy" recommendation to the public, while in private correspondence
revealed complete contempt for the same stock. The commission says, "The

record-keeping rules are a keystone of the surveillance of brokers and
dealers by commission staff and the security industry's self-regulatory
bodies." (San Jose Mercury News 4 Dec 2002)
http://www.siliconvalley.com/mld/siliconvalley/4661957.htm

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Michael Perelman
Economics Department
California State University
michael@xxxxxxxxxxxxxxxxx
Chico, CA 95929
530-898-5321
fax 530-898-5901