Morgan Stanley will pay $35 million to settle Securities and Exchange Commission allegations that one of its units failed to secure the personal data of millions of customers when replacing company hard drives and servers.
The bank improperly disposed of thousands of devices, and some were auctioned off online without checking that customer data they contained had been deleted, according to the SEC. About 15 million clients’ details were compromised over a five-year period starting 2015.
Following the announcement by the SEC, Morgan Stanley said in a statement that it was pleased to have resolved the matter. “We have previously notified applicable clients regarding these matters, which occurred several years ago, and have not detected any unauthorized access to, or misuse of, personal client information,” the firm said.
The SEC said that the firm had violated “safeguards and disposal rules.”
“Customers entrust their personal information to financial professionals with the understanding and expectation that it will be protected,” Gurbir Grewal, director of the SEC’s enforcement division, said in a statement. He called the findings “astonishing.”
Morgan Stanley agreed to pay the penalty and settle the case without admitting or denying the allegations, according to the SEC.
The violation occurred because the firm hired a moving and storage company with no experience in data destruction and then failed to properly monitor the company’s work, the SEC said. Morgan Stanley recovered some of the devices, which had thousands of pieces of unencrypted customer data. The vast majority of devices were not found, the regulator said.
Tuesday’s penalty is also related to the brokerage’s failure to properly dispose of customer and consumer report information as part of a broader hardware refresh program, during which the firm found that 42 servers were missing. The unit didn’t activate available encryption programs that were available on the devices, the SEC said.
From outstanding individuals to innovative organizations, find out who made the final shortlist for top honors at the IN awards, now in its second year.
Cresset's Susie Cranston is expecting an economic recession, but says her $65 billion RIA sees "great opportunity" to keep investing in a down market.
“There’s a big pull to alternative investments right now because of volatility of the stock market,” Kevin Gannon, CEO of Robert A. Stanger & Co., said.
Sellers shift focus: It's not about succession anymore.
Platform being adopted by independent-minded advisors who see insurance as a core pillar of their business.
RIAs face rising regulatory pressure in 2025. Forward-looking firms are responding with embedded technology, not more paperwork.
As inheritances are set to reshape client portfolios and next-gen heirs demand digital-first experiences, firms are retooling their wealth tech stacks and succession models in real time.
