http://office.microsoft.com/en-us/images/results.aspx?qu=email&ex=1#ai:MC900413668|There are plenty of reasons for deploying an email archiving solution, such as freeing up employee inboxes, keeping pertinent information on hand and improving the security of corporate information, just to name a few. But perhaps no better reason comes in the form of green paper and can number in the millions, possibly even billions.

That’s right, money is the best way to get a company’s attention when it comes to expounding the importance of email archiving. And the best way to avoid suffering such setbacks, or even facing them, may be to understand where the penalties come from and what they could potentially be.

First, we’ll highlight two of the most well known sources of penalties when it comes to email archiving – the Federal Rules of Civil Procedure and the Financial Industry Regulatory Authority. Then, we’ll highlight some real-life examples of what happens when email archiving goes awry.

Sources of penalties

Federal Rules of Civil Procedure

The Federal Rules of Civil Procedure are a set of regulations and requirements that govern how litigation is carried out in U.S. federal courts. They are also a good benchmark for companies to follow when looking to deploy compliant email archiving solutions.

The Federal Rules of Civil Procedure were revised in 2006 to take on a greater focus for electronically stored information, such as email. With the changes, eDiscovery requirements recognize all electronic communication, especially email and IMs, as now legal to request at the court’s convenience.

And the regulations are pretty clear concerning penalties. Should a company fail to produce requested Electronically Stored Information (ESI), or is found to have failed in archiving relevant data, a judge has several options. Penalties may include one or more of the following: paying for the expenses of the opposing party, contempt of court, imposing of sanctions against a case, heavy fines or even an automatic guilty verdict.

Financial Industry Regulatory Authority (FINRA)

Obviously this is a name you hear a lot about when it comes to financial organizations failing to practice proper email archiving.

Because the Financial Industry Regulatory Authority is a private corporation that acts as a self-regulatory organization, it has no standing to impose legal measures for email archiving impropriety. However, it still wields the authority to levy fines, and it isn’t shy about doing so.

In 2009, the organization handed down $50 million in fines for email archiving noncompliance.

Examples of penalties

MetLife

In November 2009, the company was fined $1.2 million by FINRA for failing to properly supervise “the review of brokers’ email correspondence with the public.”

According to the ruling, MetLife had an auditing system in place for its email archiving efforts, but failed to adequately ensure emails were forwarded properly. That allowed for the tampering of messages subject to regulation.

Piper Jaffray

Early last year, FINRA fined the investment bank $700,000 for an issue that spanned six years. As it turns out, Piper Jaffray had failed to archive more than 4 million pertinent emails during that time period.

EchoStar Satellite

The designer, developer and distributor of television set-top boxes was fined for the second time in November of last year.

New York state judge Richard Lowe concluded EchoStar “systematically destroyed evidence in direct violation of the law and in the face of a ruling.” That’s after it was previously sanctioned for deleting messages after just 21 days, against the Federal Rules of Civil Procedure mandates.

The second penalty was levied during a lawsuit in which a company was already seeking $2.5 billion in damages from EchoStar.