Morgan Stanley data breach focus shifts to hackers from adviser

U.S. authorities examining whether fired adviser Marsh was targeted by hackers after he took data from the wirehouse

Feb 19, 2015 @ 12:01 am

By Bloomberg News

A U.S. probe into how Morgan Stanley client information ended up for sale on the Internet is examining whether a financial adviser was targeted by hackers after he took data from the bank, two people briefed on the inquiry said.

While Galen Marsh was dismissed for obtaining information on as many as 350,000 wealth-management clients, his lawyer said last month that the 30-year-old financial adviser didn't seek to sell or use it for personal gain. Federal investigators are trying to determine whether his computer was breached after he removed data from the firm, the people said. There's no evidence Morgan Stanley's own computers were hacked, said one of the people, who's familiar with the company's review.

“Right from the beginning, we have stated very clearly, that Mr. Marsh had nothing to do with any information being posted on the Internet,” Mr. Marsh's lawyer, Robert C. Gottlieb of Gottlieb & Gordon, said Wednesday.

(More: Morgan breach offers universal data security lessons)

Morgan Stanley, owner of the world's largest brokerage, has sought to contain the fallout since learning in December that someone had posted information about 900 customers on the website Pastebin and asked potential buyers to pay for more with a virtual currency. The firm said last month that it had the data promptly removed from public view and that it notified law enforcement.


Some client data has appeared online again since Mr. Marsh was dismissed, prompting Morgan Stanley to have it taken down, said the people, who asked not to be identified because the probe isn't public. No customers have reported fraud from the theft of the data, which included names and account numbers but not Social Security numbers, passwords or bank information, one of the people said. Morgan Stanley has begun changing account numbers as a precaution, the person said.

Jim Margolin, a spokesman for Manhattan U.S. Attorney Preet Bharara, declined to comment. The Wall Street Journal reported earlier Wednesday that the U.S. is examining whether Marsh's computer was hacked.

Marsh joined Morgan Stanley in 2008 as a sales assistant and was promoted to financial adviser last year. He previously worked at Bear Stearns Cos., according to Financial Industry Regulatory Authority Inc. records.

He acknowledged that he shouldn't have obtained the account information and has been cooperating with Morgan Stanley to protect the firm and clients, Mr. Gottlieb said last month.


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