WEDNESDAY: Morgan Stanley’s (NYSE:MS) broker-dealer and investment adviser, Smith Barney has been suspected for his inability to protect customer information. Keeping it in view, the Securities and Exchange Commission (SEC) charged him with an estimate of $ 1.0 million.
INSIGHT: During years 2011-2014, — a then — employee, Galen J. Marsh had accessed and transferred data of approximately 730,000 accounts to his personal server, which was ultimately hacked by third parties. The hacked data was then available for an on online sale. Marsh was sentenced last December to three years’ probation after pleading guilty over the data breach. At that time, MS had not tested policies for restricting data access alongside monitoring/analyzing employees’ access to and use of the internal websites.
Federal securities laws require registered broker-dealers and investment advisers to adopt written policies and procedures reasonably designed to protect customer data.
Exclusive data obtained from USA Today cite (for readers’ concern):
|MS marked full consent to accept SEC’s verdict in this regard – without admitting or denying them|
The bank “is pleased to settle this matter, which results from the theft by a former employee of certain limited client data that was reported in January, 2015. Following the discovery of the incident, Morgan Stanley promptly alerted law enforcement and regulators, and notified affected clients.”
“Morgan Stanley worked quickly to protect affected clients by changing account numbers and offering credit monitoring and identity theft protection services, and has strengthened its mechanisms for safeguarding client data. No fraud against any client account was reported as a result of this incident.” – the financial holding company added in its statements