The Financial Industry Regulatory Authority this week said Morgan Stanley has to pay $12.5 million in fines to resolve charges for mishandling e-mail dated before the Sept. 11, 2001, terrorist attacks.

Morgan Stanley on numerous occasions failed to provide e-mails requested by claimants in arbitration proceedings and regulators, FINRA said.

The financial company previously had stated that its e-mail servers were destroyed in the 9/11 attacks, resulting in the loss of e-mails archived prior to that date. Morgan Stanley presumably had lost millions of pre-9/11 e-mails, but it was later discovered that they had been restored to the company's active e-mail system using backup tapes, which were stored in another location.

Additionally, FINRA found that Morgan Stanley destroyed many of the pre-9/11 e-mails in its possession by overwriting backup tapes that stored e-mail from 11 of its 12 servers and by allowing users to permanently delete e-mail.

Morgan Stanley neither admitted nor denied the charges.

"The integrity of our process demands that brokerage firms comply with their obligations to search diligently for, and provide in a timely way, information and documents required in arbitration proceedings and regulatory investigations," said Susan Merrill, FINRA's executive VP and chief of enforcement, in a statement.

The settlement includes the allocation of $9.5 million to two groups of customers that made arbitration claims against Morgan Stanley. Several thousand customers may be eligible to receive the money, according to FINRA.

Morgan Stanley will also have to pay $3 million for failing to provide e-mail and supervisory materials.

The Securities and Exchange Commission in 2002 found that Morgan Stanley wasn't fully compliant with regulations that require companies to retain and have access to corporate e-mail. Since then, the company has been involved in ongoing litigation related to its e-mail practices.

"We are pleased to have reached an agreement with FINRA to resolve these legacy legal matters and put them behind the firm," a Morgan Stanley spokesman said via e-mail.