Employee Fired After Customer Data Leak

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Employee Fired After Customer Data Leak

Morgan Stanley Fires Rogue Employee After Customer Data Leak

Morgan Stanley MS -3.09% has a new kind of data breach: a rogue employee.

What's in your wallet ?? :lol:

The bank said on Monday it has fired an employee who stole account information from up to 10% of its total wealth management clients, including account names and numbers. The data leak, done by an unnamed Morgan Stanley employee and not some outsider hacker group, comes just after the bank wrapped up its first calendar year as the full owner of a wealth management joint venture it acquired from Citigroup C -3.13%, which helped total wealth management assets eclipse $2 trillion in the third quarter.

According to Morgan Stanley, the employee stole account information from roughly 900 clients and posted the data briefly on the internet. No account passwords or social security numbers were taken, and the bank added that “there is no evidence of any economic loss to any client.”

One source familiar with the situation told Forbes the bank believes the employee, who is male and worked in wealth management, was looking to sell the client data to those who peddle in identity theft. The source added that bank discovered the stolen information on Dec. 27 and believes it knows exactly what data was stolen, and what wasn’t. The responsible employee was fired and Morgan Stanley has begun contacting clients who’ve been affected, and advised law enforcement and regulatory authorities of the leak.

“Overall, partial account information of up to 10 percent of all Wealth Management clients was stolen. The data stolen does not include account passwords or social security numbers. The Firm is taking the precaution of notifying all potentially affected clients and instituting enhanced security procedures including fraud monitoring on these accounts,” Morgan Stanley said. The firm has opened a hotline for customers as it investigates the incident.

The data leak comes just as Morgan Stanley begins to see the benefit of its focus on wealth management under CEO James Gorman. In July, the bank characterized eclipsing $2 trillion in total wealth management client assets as “a milestone both in the firm’s growth and in the transformation of its business model.”

Before the financial crisis, Morgan Stanley, like its investment banking peers Goldman Sachs Group GS -3.21%, Bear Stearns, Merrill Lynch and Lehman Brothers, relied on trading for the vast majority of its revenue and profits. However, after the crisis felled Bear, Merrill and Lehman, Gorman took over Morgan Stanley’s top job with a strategy to diversify the bank into wealth management activities, which aren’t as risky or capital intensive as trading.

Gorman’s wealth management bet has paid off. Morgan Stanley is now in a far stronger capital position than it was before the crisis and investors are taking a liking to its exposure to non-trading earnings, which now account for over 40% of the bank’s total revenue. For Morgan Stanley, positive sentiment is a long-time coming after the firm worked hard to recover from rating agency downgrades, regulatory changes and intermittent market panics in Europe in the years immediately following the crisis.

When reaching $2 trillion in wealth management assets in July, Gorman said it was “testament to the trust that our clients place in us and a sizable store of ballast, giving great stability to our business model.”

Now, after a leak of client data at the hands of one of its own, Gorman and Morgan Stanley’s wealth management team will need to work hard to regain that trust.

Morgan Stanley shares were lower by more than 3% at $37.42 in early afternoon trading.

http://www.forbes.com/sites/antoinegara/2015/01/05/morgan-stanley-fires-rogue-employee-after-customer-data-leak/