Earlier this week it was reported that an AM Law 100 firm who handles litigation for Goldman Sachs and Bank of America/ Merrill Lynch, accidently released unredacted versions of critical files that they had been fighting for years to keep sealed.
The files relate to an ultimately unsuccessful lawsuit filed by retail giant Overstock.com, who claimed that Goldman Sachs and Merrill Lynch (amongst others) caused its stock to fall through the practice of “naked” short selling.
The bungle occurred in response to an Overstock.com motion to unseal certain documents. The firm sent their opposition to the plaintiff’s motion to the other parties involved in the case. In doing so, they accidently attached an unredacted version of a previous filing by Overstock.com opposing the defendant’s motion to seal the papers.
This included an intriguing six-page document titled “Facts Defendants Improperly Seek to Seal,” which contained excerpts of emails written by Goldman and Merrill employees. The excerpts paint an unflattering picture of Goldman Sachs’ opinions of rules and regulations and reveal deep secrets about their dealings, including revelations about naked short selling.
This debacle serves as an important lesson for business professionals to reconsider their approach to document security. Common document sharing tools, such as email, are highly unsecure and present a greater risk of exposing confidential information. The seemingly simple mistake of attaching the wrong file to an email can have huge implications. A file can be easily dispersed and replicated without any document security or means to track the recipients.
Virtual data rooms are a highly secure way to exchange documents and collaborate with clients and third parties. Firmex Virtual Data Rooms apply 256-bit encryption and digital rights management to lock down access to sensitive documents and control who can, view, print and share documents, even after they’ve been downloaded. With a secure online document repository, firms are better able to organize high volumes of documents with clear version controls to ensure only the most up-to-date documents are made available.