American multinational Morgan Stanley has agreed to pay $60 million in order to settle a lawsuit by customers who have claimed that the Wall Street bank exposed their personal data. This was done when the bank failed twice to properly retire its old information technology.
Nearly 15 million customers filed a preliminary settlement of the proposed class action in Manhattan federal court. However, it still requires approval by US District Judge Analisa Torres.
The customers have accused Morgan Stanley of failing to decommission two wealth management data centres before the unencrypted equipment was resold to unauthorised third parties. The customers also claim that few old servers containing customer data went missing after Morgan Stanley transferred them in 2019 to an outside vendor.
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However, as per court papers, the servers were later recovered.
The customers will be receiving at least two years of fraud insurance coverage. Also, each person can apply for reimbursement of up to $10,000 in out-of-pocket losses.
As per the settlement papers, Morgan Stanley has denied wrongdoing and has made “substantial” upgrades to its data security practices.
(With inputs from agencies)
