Morgan Stanley, Clients Ink Data Security Mismanagement Class Action Settlement

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Morgan Stanley Data Security Class Action Settlement Overview: 

• Who: Morgan Stanley reached a settlement agreement with current and former clients. 
• Why: Clients claimed Morgan Stanley was negligent in allowing several potential data security incidents to occur and the parties have settled for an undisclosed amount.
• Where: The class action settlement is pending in New York federal court.

Morgan Stanley has reached a settlement agreement with a group of current and former clients to resolve consolidated class action lawsuits alleging the company was negligent in protecting their private data. 

A federal judge has subsequently ruled to dismiss a consolidated class action lawsuit filed against the investment banking company — so long as the settlement agreement gets approved, reports Law360. 

The terms of the class action settlement agreement were not disclosed. Multiple class action lawsuits were filed against Morgan Stanley last year after the company disclosed that the data security of clients may have been compromised following the closure of two data centers in 2016, reports Law360. 

Morgan Stanley revealed that some unencrypted data was unintentionally left on some of the hardware that had been removed from the decommissioned centers. 

Additionally, Morgan Stanley disclosed that it couldn’t locate a server containing encrypted data after it replaced computer equipment at a local branch in 2019, reports Law360. 

Morgan Stanley Faces Fine, Class Actions After Data Breach

Morgan Stanley agreed to pay a $60 million fine to the Office of the Comptroller of the Currency after the company faced regulatory scrutiny, following its disclosures. 

Despite the fine, Morgan Stanley continued to be on the receiving end of class action lawsuits from current and former clients who alleged the company was guilty of negligence and unjust enrichment, among other claims, reports Law360.

The class action lawsuits were eventually consolidated, with plaintiffs seeking to represent a Class of potentially millions of individuals.

Plaintiffs argued that Morgan Stanley had not learned its lesson following the 2016 incident, while some claimed they became victims of identity theft, scam calls, and fraudulent credit card charges, reports Law360.  

Morgan Stanley has maintained that plaintiffs have no standing for their claims, that it wasn’t aware of any client data being improperly accessed, and that no proof has been shown by plaintiffs that it was.  

A separate class action lawsuit was filed against Morgan Stanley in 2019 by an ex-employee who claims the company fired her from her job due to her pregnancy. 

Earlier this month, Saks and Lord & Taylor customers asked a judge to approve a $2 million class action settlement agreement to resolve claims the department stores allowed cybercriminals to steal their data. 

Are you concerned Morgan Stanley allowed your data to be potentially exposed? 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 Morgan Stanley Data Security Class Action Lawsuit is Tillman et al. v. Morgan Stanley Smith Barney LLC, Case No. 1:20-cv-05914, in the U.S. District Court for the Southern District of New York.

Read About More Class Action Lawsuits & Class Action Settlements:

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• Mental Health Provider Exposed Patients, Employees to Cyberattack, Data Theft, Class Action Alleges
• Best Buy Data Breach Class Action Settlement
• Navistar Data Breach Exposes 63K Employees’ Personal, Health Info