Sarbanes-Oxley requires a minimum 5 year retention policy for all company data that may have any relation to financial performance and customer interactions, for all companies that do business in the United States. Note that isn't "based" in the United States. Email immediately falls under this, typically all of it since it would be considered too difficult to filter which is and is not required. If a two week arbitrary email deletion policy is true Samsung just set themselves up for a major sanction from the SEC. Failure to comply with the law may also add to what the judge can use to determine if Samsung is in contempt for destroying evidence should the judge determine that they actually did.
As far as volume storage costs, that's the cost of doing business. There are companies that store just as much as Samsung would need to and they comply with the SOX act, so there is no excuse it the actually are out of compliance.
Is Samsung a Level 3 ADR in the US? Only those would be expected to. Even then, the jurisdiction of S-Ox over foreign companies is still a bit up in the air (although many of them voluntarily submit to its key guidelines).
"At issue is Samsung's company policy of automatically deleting e-mails from custodian computers every two weeks, even if the company is required to keep e-mail evidence relevant to an ongoing case."
Emails are purged every two weeks? I work at a large software company and our best friend is leaving an email paper trail to cover our ass in projects in the event of a "this isn't what I requested" dispute from a producer or another team.
Yes, a 2 week purge process is ridiculous. It's something like 5 years for relevant documents for Sarb-Ox and every company I've ever dealt with retained documents for YEARS, not weeks.
Heck, if I had to delete documents after 2 weeks, nothing would ever get done. It often takes much longer than that to simply get a response to something I send out.
Do people and practices in South Korea have a 'duty' to accommodate a court half way around the globe in Northern California with no jurisdiction over them? I would be curious to know what requirements US law imposes upon foreign corporations when selling their products here.
Wrong about 'no jurisdiction'. The US courts do have jurisdiction. By having offices and employees in the US, Samsung is bound by US law with respect to those offices and employees. This entire lawsuit is based on the fact that Samsung sells their products in the U.S. and is therefore bound by US law wrt to selling those products. If it wasn't so, a foreign country could do whatever they want in the US, including anything that is blatantly unsafe or illegal.
Furthermore, a claim of 'no jurisdiction' needs to be the first thing filed. If you are sued by a court which you believe doesn't have jurisdiction, you immediately respond by telling the court that it doesn't have jurisdiction and why. The court needs to settle the jurisdictional issue first. If you file a response to the motion, you are agreeing to the court having jurisdiction. So by filing responses, Samsung agreed to jurisdiction.
The two-week deletion period, in and of itself, is not out of the ordinary. Imagine the retention costs on a company that size! The issue, as you have surmised, is automatic deletion in the face of a duty to preserve evidence. There is no ambiguity that Samsung was required to preserve relevant e-mails, even if that required suspending the automatic deletion process. What Samsung may argue is that it did not reasonably know/believe that it was required to keep the e-mails of some particular custodians, or that it tried but failed, or any number of things (I haven’t read its opposition in the ITC matter). This will require investigation and maybe experts, reasons Samsung requested more time according to the article. Who knows what the truth is, but the judge will sort it out.
The California federal court has established jurisdiction over the Samsung entities involved (or else they wouldn’t still be in the case). Also, if Samsung filed counterclaims, then it availed itself of the court's jurisdiction.
I disagree with the bolded. I've worked for a number of companies and record retention is always in the years, not weeks, when the company bothers to spell it out. A 2 week retention policy is absurd on many levels. As stated above, it would be impossible to do business with that short of a records retention policy.
Is Samsung a Level 3 ADR in the US? Only those would be expected to. Even then, the jurisdiction of S-Ox over foreign companies is still a bit up in the air (although many of them voluntarily submit to its key guidelines).
Leve 2 and 3 are required to comply with SOX. Samsung has a NASDAQ quote, that means they are at least level 2. They also have some individual Korean divisions with rule 114A ADRs, I guess that may make for a tangled web of convenience.
Comments
Quote:
Originally Posted by Hiro
Sarbanes-Oxley requires a minimum 5 year retention policy for all company data that may have any relation to financial performance and customer interactions, for all companies that do business in the United States. Note that isn't "based" in the United States. Email immediately falls under this, typically all of it since it would be considered too difficult to filter which is and is not required. If a two week arbitrary email deletion policy is true Samsung just set themselves up for a major sanction from the SEC. Failure to comply with the law may also add to what the judge can use to determine if Samsung is in contempt for destroying evidence should the judge determine that they actually did.
As far as volume storage costs, that's the cost of doing business. There are companies that store just as much as Samsung would need to and they comply with the SOX act, so there is no excuse it the actually are out of compliance.
Is Samsung a Level 3 ADR in the US? Only those would be expected to. Even then, the jurisdiction of S-Ox over foreign companies is still a bit up in the air (although many of them voluntarily submit to its key guidelines).
Yes, a 2 week purge process is ridiculous. It's something like 5 years for relevant documents for Sarb-Ox and every company I've ever dealt with retained documents for YEARS, not weeks.
Heck, if I had to delete documents after 2 weeks, nothing would ever get done. It often takes much longer than that to simply get a response to something I send out.
Wrong about 'no jurisdiction'. The US courts do have jurisdiction. By having offices and employees in the US, Samsung is bound by US law with respect to those offices and employees. This entire lawsuit is based on the fact that Samsung sells their products in the U.S. and is therefore bound by US law wrt to selling those products. If it wasn't so, a foreign country could do whatever they want in the US, including anything that is blatantly unsafe or illegal.
Furthermore, a claim of 'no jurisdiction' needs to be the first thing filed. If you are sued by a court which you believe doesn't have jurisdiction, you immediately respond by telling the court that it doesn't have jurisdiction and why. The court needs to settle the jurisdictional issue first. If you file a response to the motion, you are agreeing to the court having jurisdiction. So by filing responses, Samsung agreed to jurisdiction.
I disagree with the bolded. I've worked for a number of companies and record retention is always in the years, not weeks, when the company bothers to spell it out. A 2 week retention policy is absurd on many levels. As stated above, it would be impossible to do business with that short of a records retention policy.
Quote:
Originally Posted by anantksundaram
Is Samsung a Level 3 ADR in the US? Only those would be expected to. Even then, the jurisdiction of S-Ox over foreign companies is still a bit up in the air (although many of them voluntarily submit to its key guidelines).
Leve 2 and 3 are required to comply with SOX. Samsung has a NASDAQ quote, that means they are at least level 2. They also have some individual Korean divisions with rule 114A ADRs, I guess that may make for a tangled web of convenience.