Missing Emails Cost Wall Street $8.3 Million

Five Wall Street firms were each slapped with a fine of $1.65 million for breaking SEC record-keeping regulations by failing to preserve internal emails.

Goldman Sachs(GS); Morgan Stanley(MWD); Citigroup's(C) Salomon Smith Barney; Deutsche Bank; and U.S. Bancorp Piper Jaffray consented to the penalties without admitting guilt.

The firms were accused of breaking SEC, Nasdaq and New York Stock Exchange rules that require business-related emails to be preserved for several years after they're transmitted. They were also cited for failing to have proper compliance mechanisms in place.

Emails have increasingly provided the smoking-gun evidence in regulatory probes of Wall Street's bull-market business practices, most famously in the investigation of Merrill Lynch(MER) and its former Internet analyst, Henry Blodget. Recently, former Salomon analyst Jack Grubman was lambasted for threatening in an email to issue "the proper rating" on a stock whose management had complained about the tone of one of his reports.

Tuesday's announcement covers violations that are separate from the ongoing global probe into Wall Street practices such as conflicted stock research and favoritism in IPO allocations. Talks toward settling that investigation are continuing.

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