On Friday night, a preliminary settlement of the proposed class action on behalf of about 15 million customers was filed in federal court in Manhattan, and U.S. District Judge Analisa Torres must approve it.
Morgan Stanley has agreed to pay $60 million to resolve a lawsuit filed by customers alleging that the Wall Street bank exposed their personal data by failing to properly retire part of its older information technology on two occasions.
On Friday night, a preliminary settlement of the proposed class action on behalf of about 15 million customers was filed in federal court in Manhattan, and U.S. District Judge Analisa Torres must approve it.
Customers would be covered for at least two years against fraud insurance coverage and each can apply for up to $10,000 in reimbursement for out-of-pocket losses.
According to settlement papers, Morgan Stanley denied wrongdoing in agreeing to settle, and made “substantial” upgrades to its data security processes.
Customers claimed that Morgan Stanley neglected to decommission two wealth management data centres in 2016 before unencrypted equipment containing customer data was resold to unauthorised third parties.
They further disclosed that some older servers containing customer data went missing after Morgan Stanley transferred them to an outside vendor in 2019. According to court documents, Morgan Stanley was able to recover the servers later.