Morgan Stanley to pay $60 million to resolve data security lawsuit Settlement reached following customers' claims that firm failed to protect personal information
By SSN Staff
Updated 2:44 PM CST, Mon January 3, 2022
NEW YORK—Morgan Stanley, a leading global financial services firm providing investment banking, securities, wealth management and investment management services, has agreed to pay $60 million to settle a data security lawsuit by customers claiming the firm failed to safeguard their personal information.
The agreement, if approved by a federal judge in Manhattan, would resolve claims over two security breaches that compromised personal information of 15 million current and former clients, according to a lawsuit filed in July 2020.
Customers accused Morgan Stanley in 2016 of failing to decommission two wealth management data centers before the unencrypted equipment, which still contained customer data, was resold to unauthorized third parties.
In addition, they 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, according to court papers.
“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,” Morgan Stanley said in a statement following the settlement.
In October 2020, Morgan Stanley agreed to pay a $60 million civil fine after the U.S. Office of the Comptroller of the Currency found that the firm lacked proper oversight in decommissioning the two wealth management data centers.
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