The Bank of America-Merrill Lynch merger is under scrutiny by the United States House Committee on Oversight and Government Reform. In connection with that review, the multi-billion dollar bailout recipient has made a treasure trove of e-mails available to the Committee and the New York Times got to sneak a peak at what was in them. What fun!
While the Times reports that none of the e-mails indicate the bank intentionally withheld material information about the deal from shareholders, the e-mails nonetheless suggest that some board members had serious concerns.
For example, when Bank of America chairman, Kenneth D. Lewis, explained the terms of the bailout funding to the board of directors, an e-mail exchange between two of the board members described the situation as “screw the shareholders” while another chided them with a reply of “no trail” – a not so subtle reminder to avoid an electronic “paper” trail. In an effort to clarify the earlier “screw the shareholders” comment, the author of that e-mail said his comment was made in the context of the economy as a whole. But then Mr. “no trail” shot back, “good comeback.”
Tsk, tsk, tsk.
E-mails are live extemporaneous musings that get burned deep into electronic storage memories. Because they are off the cuff, and many authors think they’re “off the record,” comments tend to be less guarded. That can be a serious problem that leads to legal liability.
E-mails memorialize the circumstances at a given point in time. As a result, they are a rich source of evidence because unlike memories that fade, there is no revisionist hindsight. The documents are what they are and that means a manager’s, or board of director’s, own words can come back and haunt them.
That’s why lawyers LOVE this stuff. These are the types of smoking gun documents they live for because it makes their jobs easier.
With more forms of electronic communications than ever before, including social media, the opportunity for missteps and misstatements is greater than ever before. One way businesses can protect themselves is to employees to choose and use communications channels wisely.
Highly sensitive matters, for example, might best be communicated face-to-face instead of by e-mail. That may sound old school, but meeting in person has its advantages. You get the benefit of all those verbal and non-verbal cues. Verbal inflections and tone can tell you whether someone is kidding or not as can their gestures and body language. Those additional communication are absent from e-mails yet may be critical for avoiding misunderstandings.
For more information on the subject of how to avoid smoking gun documents click here.