Insider trading

Yep, SAC's Steve Cohen probably didn't read his email

July 24, 2013: 2:24 PM ET

SAC is claiming that Steven Cohen didn't read the email at the center of the insider trading allegations, stating that he only opened about 11% of his email. Cohen isn't unusual.

By Laura Vanderkam

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FORTUNE -- With SAC Capital Advisors and Steven Cohen in the crosshairs of an insider trading investigation, SAC is claiming an interesting defense. Cohen didn't read the email at the center of the allegations, the firm told employees earlier this week, because he got 1,000 emails a day. Apparently, he only opened about 11% of them.

Whether that argument will work in court is unclear. But in terms of email behavior, Cohen isn't that unusual. "I'd be happy to talk to his lawyers," says Dmitri Leonov, VP for growth at Sanebox, an email management program. "We see this completely across board. The volume of email senior executives get is staggering."

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According to an April report from the Radicati Group, a technology research firm, there are 100.5 billion business emails sent and received per day -- a figure that rises about 7-8% per year. There are 929 million business mailboxes. That could mean that each account on average would send or receive 100 messages per day, but someone at the center of a firm with lots of people reporting to him would receive a lot more.

Leonov says that, according to his company's research, the average Sanebox user considers 42% of her emails important. The remaining 58% is considered useless chatter -- but that's for all users. "As you get higher up the ladder, the noise-to-signal ratio gets worse and worse," says Leonov. The people that report to you email about all sorts of things, plus you get cc-ed whether you wish to be in the loop or not.

That's a problem if you don't have a good system (or person) managing your email, as the average email takes about 90 seconds to completely process. If Cohen received 1,000 emails per day, processing all of that information could consume 1,500 minutes.

A day, unfortunately, has just 1,440 minutes.

"At that point, email becomes completely useless," says Leonov. "You don't pick up signals."

The problem of email overload is one reason Google (GOOG) is introducing a tab feature on Gmail to organize messages into ones that are "primary," "social", "updates," or "promotion." Sanebox likewise moves messages the system thinks you believe are unimportant to a folder where you can scan them quickly and delete in bulk.

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This batch processing saves time, because the true time cost of email -- which a McKinsey Global Institute report estimated at 28% of the workweek -- comes not from reading it or deleting it, but from the attention cost of checking what's piling up in the inbox.

"It takes 64 seconds to recover from an email interruption regardless of the importance of the email," says Leonov, who estimates that batch processing can save people over 100 hours a year. That's enough to take a two-week vacation -- or to figure out if your employees are following SEC guidelines or not.

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