Scottrade Faces Consolidated Data Breach Class Action Lawsuit

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Last week, a consolidated data breach class action lawsuit was filed against brokerage firm Scottrade Inc. in Missouri federal court. The data breach class action lawsuit accuses Scottrade of failing to safeguard customer data, which was compromised in a massive data breach.

According to the Scottrade data breach class action lawsuit, more than 4.6 million Scottrade customers were affected by the data breach, which allegedly compromised their contact information, Social Security numbers, tax identification numbers, employer contact information, email addresses and other sensitive data.

“Scottrade’s cybersecurity measures were so deficient that it never realized the massive theft occurred until two years later, when federal authorities told them about it,” the Scottrade class action lawsuit states. The hackers allegedly accessed the personal identification information (PII) of Scottrade customers from September 2013 to February 2014 without detection from Scottrade, which the plaintiffs call an “inexcusable failure of Scottrade’s obligation to take reasonable steps to safeguard this information.”

The data breach was first disclosed by Scottrade on or around Oct. 2, 2015, the data breach class action lawsuit alleges.

The consolidated Scottrade class action lawsuit was filed on Feb. 19 by plaintiffs Andrew Duqum, Stephen Hine, Matthew Kuhns and Richard Obringer. Hine filed a separate data breach class action lawsuit in California, but Scottrade argued in December that it should be consolidated with a nearly identical case that was already pending in Missouri. Scottrade argued that Missouri was an appropriate venue for the litigation because it is headquartered in Missouri and nearly all witnesses and evidence are located in the state.

According to the data breach class action lawsuit, the Federal Trade Commission has recognized the increased value of PII to use for marketing purposes. Consumers also place a high value on their personal information and the privacy of this data.

Consumers face an additional risk when their data is stolen by identity thieves, as their information can be used for a variety of crimes, including bank fraud, phone fraud, tax fraud and credit card fraud. In addition, consumers are frequently required to spend significant amounts of time and money to fix their credit.

The plaintiffs claim that they would not have opened accounts with Scottrade, or would not have paid as much for their accounts, if they had known the broker failed to take reasonable precautions to protect their PII and financial data. They filed the Scottrade class action lawsuit on behalf of themselves and others whose information was compromised as a result of the Scottrade data breach.

The Scottrade data breach class action lawsuit brings claims for breach of contract, breach of implied contract, negligence, unjust enrichment, declaratory relief, and other state consumer protection and fraud laws.

The plaintiffs are represented by Joseph J. Siprut and John S. Marrese of Siprut PC; Timothy G. Blood and Thomas J. O’Reardon of Blood Hurst & O’Reardon LLP; Geoff Spreter of The Spreter Law Firm APC; Anthony G. Simon and John M. Simon of The Simon Law Firm PC; Kyle A. Shamberg and Katrina Carroll of Lite De Palma Greenberg; Timothy D. Cohelan and J. Jason Hill of Cohelan Khoury & Singer; E. Elliot Adler; Anthony Anderson Benton Dogali and Geoffrey E. Parmer of Dogali Law Group PA; and Kate M. Baxter-Kauf and Karen Hanson Riebel of Lockridge and Grindal.

The Scottrade Data Breach Class Action Lawsuit is Andrew Duqum, et al. v. Scottrade Inc., Case No. 4:15-cv-01537-SPM, in the U.S. District Court for the Eastern District of Missouri.