![]() Morgan Stanley Smith Barney LLC (“Morgan Stanley”), its affiliates and Morgan Stanley Financial Advisors and Private Wealth Advisors do not provide tax or legal advice. Individuals should consult their tax advisor for matters involving taxation and tax planning and their attorney for matters involving trust and estate planning, charitable giving, philanthropic planning and other legal matters.ĢTax laws are complex and are subject to change. Individuals are encouraged to consult their tax and legal advisors (a) before establishing a Retirement Account, and (b) regarding any potential tax, ERISA and related consequences of any investments or other transactions made with respect to a Retirement Account. Morgan Stanley does not provide tax or legal advice. For more information regarding Morgan Stanley’s role with respect to a Retirement Account, please visit Tax laws are complex and subject to change. When Morgan Stanley provides investment education, takes orders on an unsolicited basis or otherwise does not provide “investment advice”, Morgan Stanley will not be considered a “fiduciary” under ERISA and/or the Code. The investment banking firm - no stranger to data breaches - admitted that attackers stole personal information of its customers by hacking into an Accellion server of a third-party vendor, which it uses for file-sharing and transfers.1When Morgan Stanley Smith Barney LLC, its affiliates and Morgan Stanley Financial Advisors and Private Wealth Advisors (collectively, “Morgan Stanley”) provide “investment advice” regarding a retirement or welfare benefit plan account, an individual retirement account or a Coverdell education savings account (“Retirement Account”), Morgan Stanley is a “fiduciary” as those terms are defined under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and/or the Internal Revenue Code of 1986 (the “Code”), as applicable. News of the SEC’s fine comes after Morgan Stanley was caught up in a data breach last year as a result of the Accellion hack. “We have previously notified applicable clients regarding these matters, which occurred several years ago and have not detected any unauthorized access to, or misuse of, personal client information,” said Susan Siering, a spokesperson for Morgan Stanley. In a statement given to TechCrunch, Morgan Stanley didn’t admit or deny the findings but said it is “pleased to be resolving this matter.” Today’s action sends a clear message to financial institutions that they must take seriously their obligation to safeguard such data.” “If not properly safeguarded, this sensitive information can end up in the wrong hands and have disastrous consequences for investors. Grewal, director of the SEC’s Enforcement Division. Customers entrust their personal information to financial professionals with the understanding and expectation that it will be protected, and MSSB fell woefully short in doing so,” said Gurbir S. “MSSB’s failures in this case are astonishing. The regulator added that, during this process, MSSB learned that the local devices being decommissioned had been equipped with encryption capability but had failed to activate the encryption software. The SEC also alleged that Morgan Stanley lost track of 42 servers that potentially contained unencrypted customer data when it decommissioned local office and branch servers as part of a hardware refresh program. “While MSSB recovered some of the devices, which were shown to contain thousands of pieces of unencrypted customer data, the firm has not recovered the vast majority of the devices,” the SEC said in a statement. Some of the hard drives were later found on an internet auction site with customers’ personal data still stored within. ![]() Morgan Stanley hired a moving and storage company with “no experience or expertise in data destruction services,” according to the SEC and failed to properly monitor the moving company’s work. MSSB, now known as Morgan Stanley Wealth Management, is the wealth and asset management division of banking giant Morgan Stanley, which this week agreed to pay $35 million to settle allegations that it failed to properly dispose of hard drives and servers containing its customers’ personal data over a five-year period as far back as 2015. Securities and Exchange Commission has agreed to settle charges against Morgan Stanley Smith Barney (MSSB) for its “astonishing” failure to protect the personal identifying information of some 15 million customers.
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