US bank to pay $60mn for exposing personal data

US-based multinational investment bank Morgan Stanley has agreed to pay $60 million to settle a lawsuit by clients who claim the bank exposed their personal data by failing to upgrade its information technology.

In a lawsuit on behalf of around 15 million customers, Morgan Stanley was accused of failing to properly dispose of two wealth management data centers in 2016. The unencrypted equipment installed in the data centers was resold while still holding customer data. Also, in 2019, Morgan Stanley allegedly transferred some older servers with customer data to a third party. The servers reportedly went missing for some time, jeopardizing the information they held. According to court papers, the bank later recovered the servers.

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A preliminary settlement of the proposed class-action lawsuit was filed last Friday in a Manhattan federal court, and now requires approval by US District Judge Analisa Torres. Under the settlement, customers would get at least two years of fraud insurance coverage, and each can apply for reimbursement of up to $10,000.

While agreeing to pay up, Morgan Stanley denied any wrongdoing and pledged it has already made substantial upgrades to its data security practices, settlement papers state, as cited by Reuters.

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