Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Morgan Stanley to pay $60 million to resolve data security lawsuit

Published 01/02/2022, 11:53 AM
Updated 01/03/2022, 08:40 AM
© Reuters. FILE PHOTO: The logo for Morgan Stanley is seen on the trading floor at the New York Stock Exchange (NYSE) in Manhattan, New York City, U.S., August 3, 2021. REUTERS/Andrew Kelly

© Reuters. FILE PHOTO: The logo for Morgan Stanley is seen on the trading floor at the New York Stock Exchange (NYSE) in Manhattan, New York City, U.S., August 3, 2021. REUTERS/Andrew Kelly

By Jonathan Stempel

NEW YORK (Reuters) - Morgan Stanley (NYSE:MS) agreed to pay $60 million to settle a lawsuit by customers who said the Wall Street bank exposed their personal data when it twice failed to properly retire some of its older information technology.

A preliminary settlement of the proposed class action on behalf of about 15 million customers was filed on Friday night in Manhattan federal court, and requires approval by U.S. District Judge Analisa Torres.

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.

Morgan Stanley denied wrongdoing in agreeing to settle, and has made "substantial" upgrades to its data security practices, according to settlement papers.

Customers accused Morgan Stanley of having in 2016 failed to decommission two wealth management data centers before the unencrypted equipment, which still contained customer data, was resold to unauthorized third parties.

They also said some older servers containing customer data went missing after Morgan Stanley transferred them in 2019 to an outside vendor. Morgan Stanley later recovered the servers, court papers show.

Morgan Stanley said in an email on Monday it had notified all customers who may have been affected and was pleased to settle the lawsuit.

© Reuters. FILE PHOTO: The logo for Morgan Stanley is seen on the trading floor at the New York Stock Exchange (NYSE) in Manhattan, New York City, U.S., August 3, 2021. REUTERS/Andrew Kelly

In October 2020, Morgan Stanley agreed to pay a $60 million civil fine to resolve U.S. Office of the Comptroller of the Currency accusations concerning the incidents, including that its information security practices were unsafe or unsound.

The case is In re Morgan Stanley Data Security Litigation, U.S. District Court, Southern District of New York, No. 20-05914.

Latest comments

Hmmmmm....$4.00 per "customer". Sounds generous to me. (Caveate Emptor.)
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.