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Morgan Stanley Data Breach Class Action Lawsuit Overview:
- Who: Morgan Stanley has agreed to pay $60 million to a class of nearly 15 million of its customers.
- Why: Customers claimed Morgan Stanley had failed to properly secure their private data from being accessed by unauthorized third parties.
- Where: The class action settlement was submitted for approval in New York federal court.
Morgan Stanley has agreed to pay $60 million to resolve claims it allowed a security breach to expose its customers’ private data.
A class of nearly 15 million customers claimed the 2016 breach occurred after Morgan Stanley had failed to update its information technology on two separate occasions.
Morgan Stanley learned of the incident in 2017 after it was contacted by a third-party vendor who informed them it had purchased IT equipment that contained access to its customers’ data, according to the motion for approval.
In addition to the settlement funds, customers will be given two years of fraud insurance coverage and the possibility of applying for up to $10,000 in personal losses.
“Additional compensation for lost time, if documented, can also be claimed,” the motion for approval states.
Morgan Stanley Guilty Of Negligence, Unjust Enrichments, Customers Say
The settlement was reached back in November; however, the terms of the agreement were only disclosed at the end of December.
Customers that included current and former clients argued in a number of class action lawsuits that, among other things, Morgan Stanley was guilty of negligence and unjust enrichments.
The claims, which were ultimately consolidated, came after Morgan Stanley admitted to failing to remove unencrypted data from hardware that was removed from decommissioned centers.
Customers argue that the unencrypted data was later sold to unauthorized third parties who were able to access their private information.
Morgan Stanley additionally disclosed that it had been unable to locate a server containing unencrypted data that was replaced from a local bank branch.
Company Continues To Deny Wrongdoing, Says It Had No Knowledge Of Data Breach
The investment banking company ultimately agreed to pay a fine of $60 million to the Office of the Comptroller of the Currency after facing scrutiny following its disclosures.
“Notably, this Settlement provides for a non-reversionary cash settlement fund for the benefit of Settlement Class Members in the same amount as the OCC fine, $60 million, in addition to other very substantial benefits,” states the motion for approval.
Morgan Stanley continues to deny any wrongdoing and that it had any knowledge that any data was improperly accessed, according to the settlement agreement.
Morgan Stanley was the subject of a separate class action lawsuit filed by a former employee in 2019 who argued she had been fired from her position due to becoming pregnant.
Was your private data exposed in the Morgan Stanley security breach? Let us know in the comments!
The plaintiffs are represented by Linda P. Nussbaum of Nussbaum Law Group PC and Jean S. Martin, Ryan J. McGee, and Francesca Kester of Morgan & Morgan PA.
The Class Action Lawsuit is In re: Morgan Stanley Data Security Litigation, Case No. 1:20-cv-05914, in the U.S. District Court for the Southern District of New York.
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38 thoughts onMorgan Stanley Agrees To Pay Customers $60M To Resolve Data Breach Negligence Claims
please add as i’ve been a victim of theft resulting from a data breach and the bank refuses to acknowledge it.