Are you a customer of the Morgan Stanley Investment bank? Have you heard of the Morgan Stanley data breach settlement and want to find out more about this? Read this review to find out more!
What is the Morgan Stanley Data Breach Settlement
In 2016 customers accused Morgan Stanley of having failed to decommission two wealth management data centers before the unencrypted equipment, which still contained customer data, was resold to unauthorized third parties. Data stored on the decommissioned data center equipment, including customers’ Social Security numbers and birth dates, weren’t fully wiped clean and the equipment went missing. A software flaw left data on the old servers in unencrypted form, they claimed. “We have previously notified all potentially impacted clients regarding these matters, which occurred several years ago, and are pleased to be resolving this related litigation,” the bank said in a statement
“In 2020, after an investigation, the Office of Comptroller of Currency (OCC) directed Morgan Stanley to provide notice of the Data Security Incidents to its potentially affected current and former clients,” the motion reads. “Morgan Stanley began distributing notice letters in July 2020. The action by the OCC resulted in a consent order stating that Morgan Stanley “failed to effectively assess or address the risks associated with the decommissioning of its hardware.”
Following notification, a class-action lawsuit was launched in 2020. Separately, a $60 million fine was issued by the OCC for data protection failures.
Morgan Stanley has however agreed to pay $60 million to settle the lawsuit
Customers would receive at least two years of fraud insurance coverage, and each can apply for reimbursement of up to $10,000 in out-of-pocket losses
Conclusion
Morgan Stanley has also denied wrongdoing in agreeing to settle and has also made “substantial” upgrades to its data security practices, according to settlement papers. The U.S. District Judge Analisa Torres has to sign off on the deal before it can take effect. The case is Tillman et al v. Morgan Stanley Smith Barney LLC, 20-cv-5914, U.S. District Court, Southern District of New York (Manhattan).
To read about other settlement cases, click Here
