Reference no: EM131715485

Question: Delete It and Go Free! Henry C. Yuen, the former chief executive officer of Gemstar-TV Guide International, was under investigation by the Securities and Exchange Commission (SEC) for committing an accounting fraud that resulted in billions of dollars of lost market value for investors. The SEC's case was being developed with the use of e-mails and other electronic documents. During the continuing investigation, Mr. Yuen installed a software tool called Eraser on his company PC and proceeded to wipe the entire contents of his hard drive, including unallocated space, so that no electronic courtroom evidence could be recovered.

The hard drive contained e-mails, corporate documents, and other electronic documents that had been subpoenaed by the SEC. Eraser is sold by Heidi Computers, Ltd, an Irish company, and costs about $21, and it is available at https://www.heidi.ie/node/6. Yuen's action destroyed needed electronic evidence for the fraud case. Consequently, Mr. Yuen, unlike the top officers at Enron, could not be effectively prosecuted for a complex securities fraud that included recognizing millions of dollars in phantom and kickback revenues on Gemstar's audited annual report. Instead of charging Yuen with securities fraud, he was charged in a civil case and with obstruction of justice. What should have been done to prevent the destruction of electronic evidence contained on a company's computers?