Parting is such tweet sorrow…

With humble apologies to The Bard for the headline, a recent story picked up by the The Wall Street Journal chronicles the dismissal of a Chief Financial Officer for his candid and extemporaneous disclosures via Twitter and Facebook.  This is yet another in a long series of headline-grabbing stories related to the perils of un-checked social media gaffes.

The tweeter in question is Gene Morphis who, until quite recently, was the CFO of Francesca’s Holdings Corp.  Through its subsidiary, Francesca’s operates a chain of retail boutiques offering apparel, jewelry, accessories, and gifts to female customers.  The company was founded in 1999, is headquartered in Houston, and has a $1 billion market capitalization.

According to the The Wall Street Journal, Mr. Morphis “maintained a publicly viewable profile on Facebook, authored a blog called ‘Morph’s View’ and maintained a Twitter account under the handle ‘theoldcfo.’  Online, he discussed everything from Christmas to college basketball, and occasionally company doings.”  It was the last point in this list that brings him to our attention.

The Journal reports that Morphis posted information related to his dealings with Francesca’s board, an investor road show, earnings calls, and other corporate interactions.  Following an internal investigation led by outside counsel, the company has stated that it terminated Morphis “for cause” and that it is “disappointed by this situation but we expect our executives to comply with all company policies.”

While this specific fact pattern is not familiar to this editor, we can perhaps expect similar examples to come.  According to a recent survey from the Society for Human Resource Management, only two in five employers have formal social-media policies.  Perhaps just as telling, of those organizations with formal policies, one in three have taken “disciplinary action” against an employee in the past year.

The take-away?  Social media technologies represent a significant source of both benefit and risk to organizations today.  Examining these benefits and risks is becoming more and more crucial, and placing these benefits and risks within the context of existing compliance frameworks is becoming the only way to proportionally manage the same.

General Counsel Toolworks Forum: Data Governance & eDiscovery

Sponsored by Grant Thornton LLP’s Forensic & Litigation professionals, the Forum offers educational events and resources for today’s in-house counsel and corporate senior management. We collaborate with trial and transaction lawyers from some the nation’s leading law firms to bring you periodic complimentary webcasts addressing important financial, operational and legal issues that can impact your organization.

Each event will be supported by a customized Toolbox — documents and other resources offering guidance on the topics covered by the webcast.  The next Toolworks Forum will focus upon the state of the e-discovery marketplace; the importance of intelligent, proactive information and litigation management; and practical steps companies can take to reduce expenses and risks associated with civil litigation and government investigations.

This webinar event will be held on Thursday, January 19, 2012, and it will begin at 1:00pm Eastern time and continue for 90 minutes.  CLE credit has been applied for, and full details can be found here.  Johnny Lee, Director in Grant Thornton’s Forensic & Litigation practice, and Dante Stella, eDiscovery practice leader at Dykema Gossett, will present.

Divorce Law ruling with potentially far-reaching eDiscovery implications…

A fascinating case from Connecticut may shake up the eDiscovery world.  About a month ago, Judge Kenneth Schluger ordered that soon-to-be-divorced couple Stephen and Courtney Gallion exchange the login information for their Facebook and dating websites.

Like many recent examples from the case law, the reasoning adopted by the court was that the content found within these accounts speaks directly to a matter before the bar.  Namely, Stephen Gallion is alleging that such content raises questions of parental fitness, something that speaks directly to the issue of custody in this divorce case, according to his divorce attorney Gary Traystman.

The reason this was elevated to the judge is that a prior agreement between the parties to share these account credentials broke down after evidence arose (according to Traystman) that Courtney Gallion had texted a friend, requesting that the recipient log into her accounts, delete some messages, and change some passwords.  The judge issued an injunction against such misbehavior, and he then ordered the parties’ attorneys to exchange passwords for such accounts held by both spouses as a furtherance to the discovery process.

Interestingly, this judicial order violates Facebook’s terms of service.  This raises questions of conflicting guidance, among others, though the parties are undoubtedly going to err on the side of listening to a judge.  As traditional notions of privacy continue to morph within the legal landscape, we will undoubtedly see more of these cases…so be careful what you put into your digital archive—no matter how private you believe it to be, it is both permanent and potentially discoverable.

“Controlling your Data Avalanche” Webinar…

 

I am pleased to announce that I will join luminaries from Vedder Price, a prominent U.S. law firm, in a discussion on “Managing your Data Avalanche” on November 16, 2011.  This webinar will delve into strategies for satisfying an organization’s legal obligations associated with Records Retention, eDiscovery, Litigation Holds, and Data Privacy.

“All too often, companies approach their data management obligations reactively and in a piecemeal fashion. This need not be the case; in fact, companies can satisfy their legal obligations with greater certainty — and more economically — through comprehensive data management strategies.”

This Webinar will be of interest to General Counsel, Chief Compliance and Information Officers, and those with a key role in managing eDiscovery or litigation within an organization.  This Webinar will provide an overview of legal trends in data management, with a specific focus on social media, cloud computing, eDiscovery, litigation holds, and data breach preparedness and response.  We will discuss ways in which companies can better manage their data through proactive data-management strategies.

To register for this webinar, please click here.  (Login information and presentation materials will be sent to registrants prior to the webinar.)

Click to learn more about Grant Thornton’s Forensics, Investigations and Litigation practice.   Click to learn more about Vedder Price’s Records Management, eDiscovery and Data Privacy practice.

Excellent Session with the IT GRC experts at annual ISACA Conference…

Last week, I had the pleasure of presenting to a lively audience at the world’s leading conference for IT governance, risk and compliance professionals. The event, hosted at the Ritz-Carlton Hotel in Orlando by the good folks at ISACA, brought together a panoply of experts in the auditing, compliance, privacy, and information security space.

I presented on the subject of Data Governance and Electronic Discovery, and how these concepts represent “flip sides of the same coin.” What was particularly rewarding for me was the level of interest and participation during our interactive case study. Thanks to all who attended and participated last week…I enjoyed myself immensely, and I hope that you found it a rewarding discussion.

Panel discussion: “Data Governance & Electronic Discovery – Flip Sides of the Same Coin”

ForensicUpdate editor, Johnny Lee, is moderating a panel entitled “Data Governance and Electronic Discovery – Flip Sides of the Same Coin.”  The luncheon event, hosted by the Atlanta chapter of the Society for Information Management will be held tomorrow, September 23rd at The Georgian Club.

Joining me on the dais will Ed Shubert, 25-year veteran of the F.B.I. and current Director of Corporation Security at McKesson; Marty Smith, former Chief Information Officer at ChoicePoint; and Michael de Janes, former General Counsel and Chief Data Officer at ChoicePoint.  I’m excited about diving into some complex issues with these gentlemen, and I hope to see some familiar faces in the crowd.  Details on the event can be found here.

Radio Show Appearance: Guest Expert on Business Fraud Awareness

ForensicUpdate editor, Johnny Lee, hit the airwaves again with colleague Philip Ratliff.  This time our host was Alan Butler, host of Atlanta’s Premier Business Talk Show “Butler on Business.”  Alan and co-host Jason Riddle facilitated a lively discussion covering a areas of concern to business owners and managers alike.

Listen as Philip Ratliff and Johnny Lee of Grant Thornton LLP’s Atlanta Forensics & Litigation practice comment on a broad variety of fraud issues facing organizations—especially in a down economy.  Segment one of the program can be found here; segment two can be found here. Please note that the views and opinions expressed are personal views and are not necessarily those of Grant Thornton; click here for more on this.

Trick or Tweet? Radio show appearance discussing recent issues on social media…

“Social media follows you around. Unlike Vegas, what happens online stays online forever with participants, leaving behind a wake of electronic information. As millions of smart-phone, Twitter, and Facebook users take to the Internet to send messages and post updates, they may place themselves and their businesses at risk.”

ForensicUpdate editor recently hit the airwaves with colleague Philip Ratliff on San Diego’s popular legal talk radio show with Jeff Isaac, host of “The Lawyer in Blue Jeans” program, to illuminate the concerns and issues related to the risks of social media use by individuals and businesses alike.

Listen as Philip Ratliff and Johnny Lee of Grant Thornton LLP’s Atlanta Forensic & Litigation practice discuss social media risks that can become serious issues if not dealt with carefully. Please note that the views and opinions expressed are personal views and are not necessarily those of Grant Thornton; click here for more on this.

Forensic Update editor presenting at North American ISACA conference…

The world’s leading conference for IT audit, control, security and governance professionals holds its 2011 annual conference in Las Vegas. ForensicUpdate editor, Johnny Lee, will present on the topic of “Data Governance and eDiscovery: Good Faith, Bad Actors, and Questionable Data.”  Click here for more details.

Litigation Holds, Novel Arguments, and Great Expectations…

Much has been made of recent case law that seems to prescribe a very particular set of steps that parties must take to ensure that potentially relevant evidence is not damaged.  Indeed, courts often work to ferret out “good faith” dealings among parties wrestling with the digital haystacks of electronic discovery (q.v., Courts expect affirmative steps during Litigation Holds and More data on Litigation Hold failures for more details on this).

An interesting case from late 2010 highlights just how closely some courts are scrutinizing counsel’s obligations to both initiate evidence-preservation efforts and to monitor that preservation throughout the litigation lifecycle of a given matter.  In Am. Gen. Life Ins. Co. v. Billard, 2010 U.S. Dist. LEXIS 138570 (N.D. Iowa Dec. 29, 2010), a defendant insurance company sought to obtain details related to both the nature and extent of the Plaintiff’s litigation hold protocols.

Plaintiff’s response was both curious and bold.  Conceding that there was no litigation hold issued and that counsel had, in fact, received but not reviewed the company’s record retention policies and procedures, counsel proceeded to tell the court that neither of these may be important because the Plaintiff employed a “comprehensive method” for preserving electronically stored information (“ESI”).

Unfortunately (at least for followers of this particular arena of case law), the court punted on the question of whether “comprehensive method” of ESI preservation could obviate the need for a litigation hold letter (and accompanying monitoring by counsel).  That said, the court did require Plaintiff to either produce any litigation hold letters issued or to state that none in fact were issued, effectively forcing an admission that counsel may have dropped the ball in failing to put individual custodians on notice of their preservation obligations.

Leaving aside the novel argument that a sophisticated data-preservation system could allow organizations to avoid spoliation dangers, the court in this case seems to rebut another motif in the eDiscovery universe that is receiving a lot of attention.  The theme in question is what commentator Ralph Losey has aptly dubbed the “Luddite fallacy” (albeit in a slightly different context).  Simply put, the fallacy is that technology will eventually displace the independent judgment of both counsel and those data custodians with direct knowledge of potentially relevant evidence.  We see this in the well chronicled fears that document review technologies will displace high-dollar reviewing attorneys.  It now seems that we must apply equal skepticism to the perceived “threat” that technology can displace the experts’ roles in evidence preservation and production.

Until courts bless, without qualification, the notion that you can hit the “Easy Button” and dispense with your litigation risks, this commentator thinks it best to stick with the tried-and-true method of opening lines of communication early and often among counsel, relevant data custodians, information technology professionals, and any other experts that may be deployed in a given litigation or investigation.  Technology can support these key steps in very effective and efficient ways, but the failure leverage the appropriate individuals and processes could result in new and memorable case law…though not necessarily in a way that your organization would find beneficial.