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Email filters to stop leaks

New software filters email messages to make sure that confidential or offensive information doesn't leak out.

Stock brokerages and other companies will soon be able to monitor every employee's email messages to make sure nothing the company disapproves of will leak out.

A consortium of three companies are combining their technologies to provide software that filters messages looking for key words or phrases that would indicate disclosure of confidential information, high-pressure sales tactics, or inappropriate language.

The three companies?Sequel Technology, SRA International, and Integralis--haven't named their product yet, but expect it to hit the market by July 1.

The email-monitoring technology is being developed specifically to comply with new rules from the U.S. Securities and Exchange Commission, the New York Stock Exchange, and the National Association of Securities Dealers about the electronic dissemination of information.

While the initial release will be targeted at the financial community, the three companies intend to eventually offer the software to any company that handles other sensitive data, including banking statements, medical records, personnel records, client-lawyer communications, and insurance claims.

The SEC's formal rule-making initiative is a reaction to a case last year when information disclosed in email about a company ultimately resulted in its collapse and removal from Nasdaq.

The email surveillance system will screen messages for telltale phrases, then put questionable messages into a holding area for a corporate compliance officers to review and then send or return to the sender.

Although the practice raises privacy concerns, several courts have ruled that email messages sent from a computer owned by the company are also company property, said Michael Reingruber, SRA's director of financial services.

The product could have also been used to screen email for inappropriate or offensive messages that have spurred recent lawsuits at several large companies.

Citibank has been hit with a class-action lawsuit by two black employees who alleged that racist email exchanged by managers had created a hostile work environment. In another suit, 25 women at Smith Barney alleged sexual harassment and discrimination based on electronic messages. Morgan Stanley also recently disciplined seven employees for distributing racist email jokes by email.