Morgan Fined for Failing to Retain E-Mails

Brokerage Morgan Stanley agreed to pay a record $15 million to settle a Securities and Exchange Commission probe into its failure to preserve e-mails.

Morgan Stanley said in a regulatory filing Monday that under the preliminary agreement, it would be cited with a violation of SEC rules.

The firm is also discussing resolution of “related charges” with the NASD, the Wall Street watchdog formerly known as the National Assn. of Securities Dealers.

The fine is the highest ever levied by the SEC against a firm for failing to retain e-mails, a person familiar with the matter said. Regulators analyze e-mails for evidence when investigating possible securities-related misconduct.

“The SEC in recent years has been looking for and relying upon e-mail communication as a major source of evidence,” said John Sturc, a former enforcement lawyer at the agency now with Gibson, Dunn & Crutcher in Washington. “It wants those records retained, and what you’re seeing here is a reinforcement of that concern.”