FROM THE SIA SHOW: Legato Preps Firms for Subpoenas

It seems clear that New York State Attorney General Eliot Spitzer has done more to spur development in the financial-services-technology sphere than anyone on Wall Street. In fact, Legato Software (booth #3512) is building a line of business around the capability of responding to one of Spitzer's subpoenas -- specifically, responding to large-but-specific requests from investigators for company e-mails.

Chris Gray, vice president of compliance solutions for Legato, a division of EMC Corp., says that not having the proper technology in place means not being able to respond cost-effectively to an official request for information. To help firms prepare for such an unenviable eventuality, Legato is hard at work developing "advanced-litigation or investigation-support" technologies.

"The current models of investigative support are too costly," Gray says. "The reason for that is the support is broken into two activities -- one hits IT and the other hits legal staff. We are working on the first integrated model where legal staff can work directly against native message stores," he asserts.

"Currently, legal staffs have a very limited ability to quickly and accurately respond, which is the metric you have to measure these things by. Whether or not there is a violation involved is besides the point," he adds.

Gray explains that as investigations continue, authorities are becoming more knowledgeable about the different areas where information can reside. In turn, firms must be prepared to efficiently gather and present information from any number of technological formats -- from servers to laptops, and from desktops to backup tapes.

"This causes problems for IT to respond to. So they produce a bulk response that is broad and has to be revised by the legal staff," he says. That response involves converting the information into a TIFF or PDF and uploading that information into a legal-case-management product, such as one of Case Central's products or Steelpoint's Introspect.

According to Gray, Legato provides a lower-cost and faster alternative by allowing legal departments to directly and automatically work with a body of archived e-mail. He says that part of the solution is available now, with other parts slated for completion later this year. Gray adds that Legato is working on the type of "five-nine availability" (99.999 percent reliable) that financial-services firms require from their software and infrastructure equipment.

E-mail storage and maintenance technologies have to fail over automatically, he says, whether for reasons of maintenance, upgrades or disaster. "And I don't just mean in terms of one server to another, but from one site to another," he explains. All information, he says, has to be replicated in real time. "Because of who we sell to, our products can't work in any other way. The reality of financial services is that you have to provide this level of service or someone else is going to, and you are going to lose."

Regarding the Securities Industry Association Technology Management Conference and Exhibit, Gray says it's one of the best places to make sure Legato is on top of things. "The show represents a gathering of the key players in the financial-services industry, and we think the financial-services industry is the tip of the spear for many other markets in terms of regulatory compliance and best practices around e-mail and related risk management." More specifically, he says, leading the way in financial services are the broker-dealers.

"None of the other industries we target [e.g., insurance, healthcare, etc.] are as aggressive or sophisticated as financial services" in the e-mail and compliance area, Gray says. "If you win in financial services, you win elsewhere." <<<