Morgan Stanley Agrees to Pay $6.5 Million Fine in Agreement with AGs Over Compromised Customer Information
17 November 2023 - 4:48AM
Dow Jones News
By Denny Jacob
Morgan Stanley agreed to pay a fine of $6.5 million following an
agreement with a coalition of attorneys general over the financial
services provider compromising millions of customers' personal
information.
Morgan Stanley, doing business as Morgan Stanley Smith Barney
LLC, failed to decommission its computers and erase unencrypted
data in certain computer devices that were later auctioned while
still containing consumers' personal information, according to New
York Attorney General Letitia James.
One incident involved Morgan Stanley hiring a moving company
with no experience in data destruction services to decommission
thousands of hard drives and servers containing sensitive
information, James said. The company was only made aware of the
problem when a purchaser from an auction discovered the data and
called.
In a second incident, Morgan Stanley found that 42 servers, all
potentially containing unencrypted customer information, were
missing during a decommissioning process, according to the New York
attorney general.
In addition to the fine, Morgan Stanley agreed to adopt a series
of steps aimed at strengthening its data security measures
including encrypting all personal information, whether stored or
transmitted, between documents, databases and elsewhere;
maintaining an incident response plan that documents incidents and
responses; and maintaining a vendor risk assessment team, among
other provisions.
"We have previously notified all potentially impacted clients
regarding these matters, which occurred several years ago, and are
pleased to have resolved this related investigation," said a Morgan
Stanley spokesperson.
Joining James in the agreement are the attorneys general of
Connecticut, Florida, Indiana, New Jersey and Vermont.
Write to Denny Jacob at denny.jacob@wsj.com
(END) Dow Jones Newswires
November 16, 2023 12:33 ET (17:33 GMT)
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