Text Messaging, IMs a Ticking Time Bomb

You have to give the nation's credit rating agencies high marks for at least one thing: archiving their wireless communications. While Moody's Investors Service, Standard & Poor's and Fitch Ratings otherwise showed scant regard for their own industry's rules, regulations and ethics, they did remember to save all those pithy text messages and instant messages fired off from enterprise-issued smart phones.

Because they did, Rep. Henry Waxman, chairman of the House Committee on Oversight and Government Reform, was able to introduce at an Oct. 22 hearing this embarrassing IM sent between two Moody's executives: "We rate every deal. It could be structured by cows and we would rate it."

Coupled with piles of incriminating e-mail ("If you can't figure out the loss ahead of the fact, what's the use of your ratings? … If the ratings are b.s., the only use in ratings is comparing b.s. to more b.s."), the electronic communications of the credit rating agencies again proved that everything written by any employee on any company device is fair game for prosecutors and regulators everywhere.

Click here to read about how e-discovery providers may benefit from the Wall Street crash.

E-mail, of course, has been long been required to be archived by a host of regulations, including the Sarbanes-Oxley Act, but in December 2007 FINRA (Financial Industry Regulatory Authority) decreed text and instant messages must also be saved. FINRA, according to its Web site, is the "largest nongovernmental regulator for all securities firms doing business in the United States."

But even outside of financial institutions, the trend is clear about saving and archiving all communications. The Sarbanes-Oxley Act applies to all publicly traded companies, and virtually all companies face rules and regulations tied to retaining communications dealing with employment practices. HIPAA (Health Insurance Portability and Accountability Act) rules apply to all medical organizations (remember the hospital where an employee text-messaged friends that George Clooney had checked in? The suspended employee certainly does).

The regulatory expansion to include all wireless communications sent over company-owned devices has motivated at least three companies to offer compliance software. LiveOffice, Akonix Systems and Onset Technology all offer software for saving and archiving wireless communications, including text and instant messages. Reflecting Research In Motion's domination of the enterprise handheld market, the software from all three companies is now limited to RIM BlackBerrys, but coverage for Windows Mobile-equipped devices is on the drawing board.