(e)Male Fraud

What is it with email?

Whether it’s talking about the Talking Heads or comparing clients to Muppets, there’s something about the immediacy and intimacy of email that releases the inner locker-room of the most sophisticated professional. Banks like Barclays, Standard Chartered, UBS, and Royal Bank of Scotland have paid billions in fines because—apart from trash talk trading-floor profanity—their traders exclaimed, “it’s amazing how fixing can make you so much money.” How could they put that in writing?

Email is forever. Asking someone not to forward a joke, song, or comment is worthless. Once you send off an email, it gets stored on someone’s server somewhere. And because it’s digital, it can be discovered with a simple search algorithm. If you write it, they will find it. And in large organizations, if something sketchy is going on, it’s a near certainty that there will be at least one stupid, profane email, IM, or voice-mail admitting to the crime. The authorities don’t have to be bloodhounds. All they need is access to the company’s servers.

Remember: email and instant messages are documents. Even if they’re deleted, they can be recovered. Email is great for communicating facts. But if you have an opinion on a sensitive issue, keep it to yourself. Or pick up the phone. Remember the New York Times rule: assume any email you send could appear tomorrow in a little box in the front page of the times. So remember what your grandma said: if you can’t say something nice, don’t say anything at all.

Douglas R. Tengdin, CFA

Chief Investment Officer

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