Tuesday, June 14, 2005

The email scandal list grows...

It looks like Kofi Annan's is going to join the list of high profile people brought down thanks to an email. Am I missing anyone?

Kofi Annan, UN

AP -- The committee probing the U.N. oil-for-food program announced Tuesday it will again investigate Secretary-General Kofi Annan after two e-mails suggested he may have known more than he claimed about a multimillion-dollar U.N. contract awarded to the company that employed his son.

One e-mail described an encounter between Annan and officials from Cotecna Inspections S.A. in late 1998 during which the Swiss company's bid for the contract was raised. The second from the same Cotecna executive expressed his confidence that the company would get the bid because of "effective but quiet lobbying" in New York diplomatic circles.

Hank Greenberg, Former CEO of insurance giant AIG

In a statement, New York Attorney General Spitzer said AIG, led by its former chief executive and financial chief, "resorted to deception and fraud in an apparent effort to improve the company's financial results."

The complaint quoted from emails and interviews with current AIG employees that suggested both AIG CEO Greenberg and former CFO Smith were aware of, and had approved, the transactions at issue.

Jim Kilts, Gillette CEO

BOSTON (MarketWatch) -- Gillette Co. (G) was ordered Thursday to provide Massachusetts Secretary of State William Galvin with copies of its email communications with its investment bankers sent during the run-up to the company's proposed merger with Procter & Gamble Co. (PG).

Massachusetts Superior Court Judge Allan van Gestel ruled that Gillette's two investment bankers, Goldman Sachs Group Inc. (GS) and UBS AG (UBS), must turn over emails sent to seven Gillette executives, including Chief Executive James Kilts, relative to their "fairness opinion" on Procter & Gamble's offer for Gillette, according to court documents.

Henry Blodget, Merrill Lynch telecom analyst

(PugetSound Biz Journal) While Blodget was privately badmouthing InfoSpace's chief executive (Arun Sarin, at that point) and deriding the company as "a piece of junk," he was publicly recommending the stock to unsuspecting customers. InfoSpace enjoyed Merrill's highest stock rating and held a spot on the firm's "Favored 15" list at a time when Blodget's insider e-mails fretted that "this stock is a powder keg, given how aggressive we were on it earlier this year and given the 'bad smell' comments that so many institutions are bringing up."

Other stocks got equally brutal private assessments while officially blessed with Merrill's top ratings of buy or accumulate. Excite@Home was "such a piece of crap." Internet Capital Group provided "nothing positive to say." Two others were each assessed as "a piece of s--t."


Jack Grubman, Salomon Smith Barney

DOW JONES, NEW YORK -- Former Salomon Smith Barney telecom analyst Jack Grubman said email messages written by him in 2001 alleging he received outside pressure related to his rating on AT&T Corp. (T) were fabrications.

The Wall Street Journal reported Wednesday that in Jan. 2001, Grubman sent emails to an analyst at a money-management firm indicating that Citigroup Inc. (C) Chief Executive Sanford Weill pushed him to review his rating of AT&T. The emails say that Weill's alleged pressuring of Grubman was done to gain the support of AT&T Chief Executive C. Michael Armstrong, a key Citigroup board member, in a power struggle between Weill and Citigroup's former co-chairman, John Reed, in early 2000.

Here's a list from the ePolicyInstitute,

  1. Using email to send sensitive personal information and comments. The Enron Corporation used its email system to send sensitive employee information, such as Social Security numbers, wage packages, performance evaluations and other personnel information. Employees also sent revealing messages about office romances, affairs and other personal comment. When the U.S. Federal Energy Regulatory Commission seized Enron's email records in an investigation, it posted them online, creating embarrassment or dangerous security breaches.
  2. Deleting email messages during a legal investigation. Investment banker Frank Quattrone's email urging members of his technology-sector banking group at Credit Suisse First Boston (CSFB) to "clean up" their files during a Securities and Exchange Commission investigation led to his being charged with obstructing federal grand-jury and SEC investigations.
  3. Issuing potentially negative confidential internal memos. Two Merrill Lynch senior executives faced a barrage of negative publicity after someone leaked their confidential internal memo warning 50,000 employees to be careful with email content to the business media.
  4. Not monitoring employee email use, and using company email to receive illegal or embarrassing messages. An American Family Insurance employee the FBI suspected was receiving child-pornography emails at work was prevented from suppressing that evidence because his company repeatedly reminded users that it could monitor or search their computers. However, the employee's activity didn't surface until the FBI's investigation into the email source, a Yahoo! discussion group.
  5. Not controlling instant-messaging use. More than half of the regional stock brokerage firm Stifel Nicolas had downloaded free IM software and were using it without management knowledge or approval and without oversight from its compliance division, which makes sure all messages meet strict SEC and stock-exchange regulations. "Instant Messaging is a form of turbocharged email that creates a written business record that can be subpoenaed and used as evidence in litigation or regulatory investigations," Clearswift and the ePolicy Institute said.

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