Morgan Stanley (NASDAQ: MS) has agreed to pay $60 million as a fine to settle a lawsuit by its customers. The lawsuit alleged that the investment bank had failed twice to correctly rescind some of its outdated information technology that exposed customers’ personal data. Allegedly, failed to properly pull out some of its outdated information technology, and this led to their personal data being exposed.
The settlement of the class action was filed at a Manhattan federal court on Friday, Dec. 31, on behalf of around 15 million customers, but it still needs to be approved by U.S. District Judge Analisa Torres.
Shares of Morgan Stanley have gained 6.7% over the past six months as customers lodged complaints against Morgan Stanley. Complaints were for its failure to retire two wealth management data centers in 2016 before the unencrypted equipment was resold to illegitimate third parties. They said that the equipment was sold when it still possessed customer data, thus, leading to their vital personal information to trot out.
They further claimed that some older servers that contained their data had gone missing after the bank moved the same in 2019 to an outside vendor. Court papers showed that Morgan Stanley recovered the servers later.
As part of the settlement, each customer can apply for indemnification of up to $10,000 in out-of-pocket losses. Additionally, they will receive at least two years of fraud insurance coverage.
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