Scottrade Asks Judge to Move Data Breach Class Action to Mo.

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On Friday, Scottrade Inc., a discount trading brokerage, asked a judge to either dismiss or transfer a data breach class action lawsuit involving allegations the company compromised users’ private information, such as Social Security numbers.

Lead plaintiff Stephen Hine alleges in his Scottrade class action lawsuit that the discount brokerage failed to comply with industry standards and reasonably safety precautions, leading to the breach of Scottrade users’ private information.

Hine further alleges that Scottrade’s notification to consumers about the data breach was “woefully inadequate and vague,” consisting of an email announcing the attack and that although it appeared names and mailing addresses were targeted, Scottrade couldn’t rule out the possibility that email addresses and other “sensitive data” had been stolen.

On Dec. 4, the company filed a motion to dismiss the class action lawsuit or transfer it to Missouri court. Scottrade says Missouri is the appropriate venue because nearly all of the witnesses and evidence are located in the state. Further, a nearly identical Scottrade data breach class action lawsuit has already been filed in Missouri. A hearing on the matter has been set for March 14, 2016.

“Scottrade’s actions and/or omissions occurred despite prior warnings, including prior incursions of their network by third parties, who conducted fraudulent stock trades using Scottrade’s customer’s accounts, and even fines from government agencies concerning its system’s security procedures and oversight,” alleges the plaintiff in the class action lawsuit. The plaintiff argues that Scottrade could have prevented the data breach and avoided it or at a minimum reduced the harm to its customers.

Hine further alleges that many affected customers will have changed their email addresses since signing up with Scottrade and will not end up receiving email notifications regarding the Scottrade data breach. Additionally, alleges the plaintiff, the emails do not disclose the extent of the problems that may be caused by the breach.

“The database accessed … contains, among other things, Social Security numbers, email addresses and other ‘sensitive data’ (which is not defined in the email),” the plaintiff alleges in the Scottrade data breach class action lawsuit. “It is highly unlikely that the hackers, having access to the above information, would only take the affected customer’s name and email address.”

According to the data breach class action lawsuit, the plaintiff is seeking an injunction requiring Scottrade to comply with regulations by using adequate security measures to prevent future breaches along with damages and restitution.

A number of class action lawsuits alleging company negligence in protecting consumer data have been filed recently, including a class action against Trump Hotels alleging the company failed to prevent data breaches at seven locations over the past year. Class actions against Anthem Inc. and Uber Technologies Inc. have also been filed over the past year. Lawmakers have been mulling over legislation to beef up privacy protection requirements for consumers as well.

Hine is represented by E. Elliot Adler of Adler Law Group APC, Timothy D. Cohelan and J. Jason Hill of Cohelan Khoury & Singer, and Geoff Spreter of Spreter Legal Services APC.

The Scottrade Data Breach Class Action Lawsuit is Hine v. Scottrade Inc., Case No. 3:15-cv-02213, in the U.S. District Court for the Southern District of California.

UPDATE: On Feb. 19, 2016, plaintiff Stephen Hine consolidated his nearly identical case with three other plaintiffs alleging Scottrade failed to keep customer’s personal information safe.