Jonathan Stempel

NEW YORK (Reuters) – Morgan Stanley (NYSE:) paid $60 million in settlement to customers who claimed that the Wall Street Bank exposed personal information of their loved ones after it failed twice to retire certain older technology.

The preliminary settlement for the proposed class action, which covers approximately 15,000,000 customers, was filed Friday night at Manhattan federal court. U.S. District Judge Analisa Tores must approve.

The customer would be covered for fraud up to two years, with the option of requesting reimbursement for as little as $10,000.

Morgan Stanley has denied any wrongdoing and agreed to settle. Settlement papers state that it made substantial improvements to its data security procedures.

Morgan Stanley was accused by customers of failing to shut down two wealth management data centers in 2016. The equipment contained customer information and was then resold to unauthorised third parties.

Morgan Stanley also stated that older servers containing customer information went missing when it transferred them to an outside vendor in 2019. Court papers reveal that Morgan Stanley eventually recovered the servers.

Morgan Stanley didn’t immediately reply to any requests for comment after business hours.

In October 2020, Morgan Stanley agreed to pay a $60 million civil fine https://www.reuters.com/article/us-usa-morgan-stanley-fine/morgan-stanley-to-pay-60-million-penalty-for-insufficient-oversight-of-data-centers-idUSKBN26T3A7 to resolve U.S. Office of the Comptroller of the Currency accusations concerning the incidents, including that its information security practices were unsafe or unsound.

In re Morgan Stanley Data Security Litigation. U.S. District Court Southern District of New York. 20-05914.