September 29, 2022

Volume XII, Number 272

Advertisement

September 29, 2022

Subscribe to Latest Legal News and Analysis

September 28, 2022

Subscribe to Latest Legal News and Analysis

September 27, 2022

Subscribe to Latest Legal News and Analysis

SEC Fines Morgan Stanley $35 Million for Alleged Failure to Protect Customer Data

On September 20, 2022, the U.S. Securities and Exchange Commission announced that Morgan Stanley Smith Barney agreed to pay a $35 million fine for the firm’s alleged failure to adequately protect the personal information of approximately 15 million customers. Morgan Stanley settled the SEC’s claims without agreeing to or denying the agency’s findings. 

The SEC alleged that between 2015 and 2017, Morgan Stanley failed to properly dispose of devices containing customer personal information. According to the SEC, Morgan Stanley disposed of thousands of hard drives and servers via a moving and storage company with no prior experience in data destruction. The moving company later sold decommissioned Morgan Stanley hardware devices containing unencrypted customer personal information to a third party, the majority of which were unable to be recovered.

In addition, the SEC alleged that Morgan Stanley failed to account for 42 servers the firm had replaced during an office hardware upgrade program. The servers, which contained sensitive customer information , had been equipped with encryption software, but the firm allegedly failed to activate the software.

Copyright © 2022, Hunton Andrews Kurth LLP. All Rights Reserved.National Law Review, Volume XII, Number 264
Advertisement
Advertisement
Advertisement
Advertisement

About this Author

In today’s digital economy, companies face unprecedented challenges in managing privacy and cybersecurity risks associated with the collection, use and disclosure of personal information about their customers and employees. The complex framework of global legal requirements impacting the collection, use and disclosure of personal information makes it imperative that modern businesses have a sophisticated understanding of the issues if they want to effectively compete in today’s economy.

Hunton Andrews Kurth LLP’s privacy and cybersecurity practice helps companies manage data and...

212 309 1223 direct
Advertisement
Advertisement
Advertisement