Banking giant Morgan Stanley will pay $1 million as penalty for failure to protect information on roughly 730,000 of its clients, the Securities and Exchange Commission (SEC) said Wednesday.
According to the SEC, the bank “failed to adopt written policies and procedures reasonably designed to protect customer data,” which enabled a then-employee to access and transfer data on the customer accounts accounts to a personal server, which the was ultimately hacked by third parties.
“A likely third-party hack of Marsh’s personal server resulted in portions of the confidential data being posted on the Internet with offers to sell larger quantities,” the SEC said.
In January 2015, Morgan Stanley acknowledged that account information for about 900 of its clients, including account numbers and names, was briefly posted on the Internet and, once detected, was “promptly removed.”
The employee at the time, Galen J. Marsh, was was criminally convicted for his actions in 2015 and received 36 months of probation and ordered to $600,000 in restitution.
According to the SEC, Morgan Stanley violated Rule 30(a) of Regulation S-P, also known as the “Safeguards Rule.”
“Given the dangers and impact of cyber breaches, data security is a critically important aspect of investor protection. We expect SEC registrants of all sizes to have policies and procedures that are reasonably designed to protect customer information,” Andrew Ceresney, Director of the SEC Enforcement Division, said in a statement.
The SEC alleges that Morgan Stanley didn’t audit or test the “relevant authorization modules” or monitor or analyze employees’ access to portals containing sensitive data.
Morgan Stanley agreed to settle the charges and pay the $1 million without admitting or denying the findings.
For more than 10 years, Mike Lennon has been closely monitoring the threat landscape and analyzing trends in the National Security and enterprise cybersecurity space. In his role at SecurityWeek, he oversees the editorial direction of the publication and is the Director of several leading security industry conferences around the world.
More from Mike Lennon
- ‘No Evidence’ of Cyberattack Related to FAA Outage, White House Says
- SecurityWeek to Host 2022 ICS Cybersecurity Conference October 24-27 in Atlanta
- Google Completes $5.4 Billion Acquisition of Mandiant
- Cybersecurity Firm ZeroFox Begins Trading on Nasdaq via SPAC Deal
- HUMAN Security and PerimeterX Merge on Mission to Combat Bots
- Last Call: CFP for ICS Cybersecurity Conference Closes July 15th
- Johnson Controls Acquires Tempered Networks to Shield Buildings From Cyberattacks
- Snowflake Launches Cybersecurity Workload to Find Threats Across Massive Data Sets
Latest News
- Germany Appoints Central Bank IT Chief to Head Cybersecurity
- OpenSSL Ships Patch for High-Severity Flaws
- Software Supply Chain Security Firm Lineaje Raises $7 Million
- ICS Cybersecurity Firm Opscura Launches With $9.4 Million in Series A Funding
- Vulnerability Provided Access to Toyota Supplier Management Network
- Patch Released for Actively Exploited GoAnywhere MFT Zero-Day
- Linux Variant of Cl0p Ransomware Emerges
- VMware Says No Evidence of Zero-Day Exploitation in ESXiArgs Ransomware Attacks
