Morgan Stanley Discarded Outdated Exhausting Drives With out Deleting Buyer Information First | by PCMag | PC Journal | Sep, 2022

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A few of the laborious drives containing unencrypted buyer information have been offered on public sale websites.

By Matthew Humphries

An investigation by the US Securities and Alternate Fee (SEC) found Morgan Stanley Smith Barney, now often known as Morgan Stanley Wealth Administration, put the private data of 15 million clients in danger as a result of manner it dealt with previous laborious drives and servers.

Beginning in 2015, and for a interval spanning 5 years, Morgan Stanley employed a transferring and storage firm a number of occasions to deal with the decommissioning of previous laborious drives and servers. There have been two issues with this determination. The primary is that the corporate chosen to deal with the drives had “no expertise or experience in information destruction providers,” in line with the SEC. The second drawback was that Morgan Stanley didn’t encrypt the information saved on these drives, and didn’t try and delete any of it earlier than handing them over to the transferring firm.

This situation led to the private information of hundreds of thousands of Morgan Stanley clients being out there on 1000’s of previous laborious drives with none type of safety. The SEC discovered that as an alternative of completely deleting the information saved on the drives, the transferring firm merely offered them on to a third-party, which in flip offered a few of them on web auctions websites with the information nonetheless intact. Most of those laborious drives have by no means been recovered.

In whole, the SEC investigation found information displaying “42 servers, all probably containing unencrypted buyer PII and client report data, have been lacking.” The gadgets being utilized by Morgan Stanley did have the power to encrypt the information being saved, however it was by no means enabled.

Gurbir S. Grewal, Director of the SEC’s Enforcement Division, mentioned that Morgan Stanley’s failures have been “astonishing,” and that the corporate “fell woefully quick” of defending its buyer’s private data. Morgan Stanley has consented to the SEC’s discovering that it “violated the Safeguards and Disposal Guidelines below Regulation S-P,” however did so with out admitting or denying the findings. The corporate additionally agreed to pay a $35 million penalty to settle the costs towards it.

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