Cyber for Plan Sponsors

Morgan Stanley Faces Data Breach Lawsuit


Morgan Stanley Smith Barney, a multinational investment bank and financial services giant, is being sued by former and current clients for allegedly failing to make sure account numbers, social security details, and other personal information were deleted from decommissioned hardware. On July 9, Morgan Stanley alerted customers that an external contractor did not completely erase hardware from two closed data centers in 2016. What’s more, in 2019, the company revealed that old servers in a handful of branches might have unencrypted customer data, per emails and letters Morgan Stanley has sent to their brokers and patrons.

The lawsuit, filed in federal court in New York, is attempting to certify a national and California class of clients claiming invasion of privacy and negligence. Another lawsuit was filed on Friday, making parallel claims of poor cybersecurity methods and violation of state unfair competition law.

Unfortunately, all different types of businesses can face cyber breaches, which could expose employee and retirement plan participants personally identifiable information.   That’s why we recommend that plan sponsors prepare for the unexpected by investing in Cyber Liability Insurance from Colonial Surety Company. Our Cyber Liability Insurance protects your employee benefit plan from covered cyber-breaches.

Our service-based solution can help your small business effectively respond to data breaches while reducing your employee benefit plan’s liability. Cyber Liability Insurance is available in our two-to-three-year ERISA bond packages, including ERISA coverageFiduciary Liability Insurance, and Cyber Liability Insurance, to give you the best value of coverage possible. Click here to get the coverage your company and its employees deserve.