Morgan Stanley to pay $35 million after hard drives with personal data of 15 million customers appear on auction • CableFree TV

Published by
Peter Kavinsky

The US Securities and Exchange Commission has agreed to settle charges against Morgan Stanley Smith Barney (MSSB) for a “striking” failure to protect the personal information of about 15 million customers.

MSSB, now known as Morgan Stanley Wealth Management, is the wealth and asset management arm of banking giant Morgan Stanley, which this week agreed to pay $35 million to settle allegations that it failed to properly dispose of hard drives and servers. containing personal data of their customers. data for a five-year period back in 2015.

According to the SEC, Morgan Stanley hired a shipping and storage company “with no experience or expertise in data destruction services” and failed to properly supervise the shipping company. Some of the hard drives were later found on an online auction site that still held customers’ personal data.

“While MSSB recovered some of the devices shown to contain thousands of pieces of unencrypted customer data, the firm did not recover the vast majority of the devices,” the SEC said. said in a statement.

The Securities and Exchange Commission also said that Morgan Stanley lost sight of 42 servers that could potentially contain unencrypted customer data when it decommissioned servers at local offices and branches as part of a hardware upgrade program. The regulator added that during this process, the MSSB learned that on-premise devices being decommissioned were equipped with encryption capability, but were unable to activate the encryption software.

“MSSB’s failure in this case is astounding. Clients entrust their personal information to financial professionals with the understanding and expectation that it will be protected, and MSSB has failed to do so,” said Gurbir S. Grewal, Director of Enforcement at the Securities and Exchange Commission. “If not properly protected, this sensitive information could end up in the wrong hands and be disastrous for investors. Today’s action sends a clear signal to financial institutions that they must take their responsibility to protect such data seriously.”

In a statement shared with TechCrunch, Morgan Stanley neither acknowledged nor denied the findings, but said it was “glad to have this matter resolved.”

“We have previously notified relevant customers of these issues that occurred several years ago and have not found any unauthorized access or misuse of customer personal information,” said Susan Seering, spokesperson for Morgan Stanley.

News of the SEC fine comes after Morgan Stanley was caught in a data breach last year. as a result of the Accellion hack. Investment banking firm not new to data leakage admitted that attackers stole the personal information of his clients by hacking into the Accellion server he uses for file sharing and transfer. third party supplier.

Peter Kavinsky

Peter Kavinsky is the Executive Editor at cablefreetv.org

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