E-mails can and will be held against you. (Up front: news, trends & analysis).

It is just commonsense that you should never e-mail something that you wouldn't want your boss to see. But today, you should also remember never to e-mail anything that could be used against you in court.

A U.S. federal judge recently ruled that e-mails written by a J.P. Morgan Chase & Co. senior staff member referring to "disguised loans" could be used as evidence in a civil trial. J.P. Morgan is trying to reclaim more than $1 billion from a group of insurers that guaranteed complex deals between J.P. Morgan and Enron Corp. The e-mails support allegations that the company helped Enron conceal its growing debt before its collapse.

The trial involves a commercial dispute between J.P. Morgan and a group of insurance companies, whose attorneys are arguing that complex securities transactions known as "pre-pays" by J.P. Morgan and other financial institutions enabled Enron to hide its true indebtedness.

In e-mails written by J.P. Morgan executive Donald Layton, the Enron deals are frequently referred to as "disguised loans," and Layton suggests that the deals are accounted for internally as loans, even though externally they are presented as prepaid forward sales contracts of gas. This seems to support the insurers' argument that J.P. Morgan knew the deals were loans but misrepresented them to outsiders--including insurers. J.P. Morgan asked Judge Jed Rakoff to exclude the e-mails from permissible evidence on grounds they were irrelevant and might prejudice the jury.

In May 1999, Layton wrote an e-mail about the bank's use of prepaid commodity transactions: "We are making disguised loans, usually buried in commodities or equities derivatives (and I'm sure in other areas) ... I am queasy about the process."

The bank's pre-pay transactions with Enron are being investigated by the Justice Department, the Securities and Exchange Commission, and by a grand jury under Manhattan District Attorney Robert Morgenthau.

Judge Rakoff's decision to admit e-mails as evidence in court is a major step backward for privacy, experts say. "There is a fine line between that which is personal and private, and that which is corporate and possibly public," said Steven Morgan Friedman, vice president of research and a senior analyst at Basex. "That line is being redrawn with, as has been the case with the Internet as a whole, the privacy side retreating."

Friedman advises professionals to use corporate e-mail in a safe and appropriate manner. For example

* Know when NOT to write something down. If you are unsure about something, perhaps it might be better to use the telephone. Never put something in writing that you may regret later.

* Know when to write things down. This, of course, does not mean that we should avoid all written records because of sensitive items. The written word confers legitimacy, and for many sensitive issues, the need for legitimacy trumps other concerns.

* E-mail is a natural, but not always a good, personal knowledge management (KM) tool. Many people "live" in e-mail, using the inbox as a personal KM and productivity tool, e-mailing themselves to-do items, notes they want to remember, and information they want to transfer around. But e-mail wasn't designed for this, and both vendors and end users need to rise to the challenge of creating software or methods that are better suited for personal KM needs.