A Banking Giant Now Gets Fined For Illegal Customer Violations

November 22, 2023

A banking giant now gets fined for illegal customer violations after personal information from millions was compromised.

Morgan Stanley will pay $6.5 million as part of a settlement with six state attorneys according to a statement from New York Attorney General Letitia James’ office.

The New York City-based firm put consumer data at risk when it failed to decommission computers and erase unencrypted data in devices that were later sold, James’ office said.

As part of the settlement, New York will receive $1.66 million, while the rest of the fine will be split between Connecticut, Florida, Indiana, New Jersey and Vermont.

The action from the attorneys general marks at least the fourth penalty Morgan Stanley has paid related to data breaches in recent years, reports BankingDive.

The Office of the Comptroller of the Currency fined Morgan Stanley $60 million in 2020 for failing to properly oversee the decommissioning of two data centers connected to its wealth management business.

Then the following year, the bank agreed to pay another $60 million in a class-action lawsuit over claims that the personal information of 15 million current and former clients was compromised when data stored on decommissioned equipment wasn’t completely wiped clean.

Related to the same incident, Morgan Stanley last year agreed to pay $35 million to the Securities and Exchange Commission to resolve allegations it hired a moving and storage company with no experience in data destruction to decommission thousands of hard drives and servers but failed to monitor the company’s work.

“No one should have their personal information auctioned off without their knowledge because a company failed to take basic steps to erase it before selling their old computers,” James said in a statement Thursday.

Also Read: A US Bank is Now Denying Customers Access to Money

Other Banking News Today

Massive US banks are now declining according to new data from the Federal Deposit Insurance Corporation (FDIC).

The latest report states that another 1,376 US bank branches shuttered in just the past 12 months.

This takes total US bank branches to just below 78,000, the lowest number since the 1980s.

78,000 branches to serve a US population of 332 million equates to branch density of 23.5 branches per 100,000 people.

The comparable figure in the UK is about one-third of the US figure, reports RetailBanker.

Total UK bank branches are down to around 5,000. With a population of 66 million, the UK branch density is about 7.6 branches per 100,000 people.

The figure is even lower in a number of European countries such as the Netherlands, 5.5 and Finland 6.2 compared to the US.

Bank branches worldwide have shuttered and now hit an all-time low.

“The total US branch network of FDIC-insured institutions reduced to 77,796 at the end of June.

The comparable figure a year earlier was 79,192. US bank branch numbers peaked in 2009 at 99,550.

The number has fallen each year from 2009 and since then total US bank branches are down by 21%.”

Chase remains the largest US bank by branches.

The Chase branch network actually increased by a net 57 units y-o-y to 4,876 at the end of June.

This still represents a drop from 2013, when the Chase branch network hit a high of 5,697 outlets.

While JPMorgan has ultimately closed more Chase-branded branches than it has opened over the last decade, it has closed branches at a much slower rate than the likes of Bank of America and Wells Fargo.

Also Read: The US Treasury Direct is Now Freezing Customer Accounts

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