Morgan Stanley Employee Pleads Guilty In Data Breach Case

An anonymous reader writes: A former Morgan Stanley financial adviser who was fired in connection with a major breach of client information pleaded guilty to accessing client data and taking it home with him. According to court records Galen Marsh copied names, addresses, account numbers, investment information and other data for approximately 730,000 accounts. "This action, which follows Morgan Stanley's initial investigation and reporting of his misconduct, makes clear that misuse of client account information will not be tolerated," the bank said in a statement.

Comments

Sounds more like Morgan Stanley screwed up.

[gurps_npc]

I used to work for PaineWebber, back when there was a PaineWebber. The real question was did he do this for his existing clients or for other broker's clients. If he did it with existing clients, than it is legal, and he did nothing wrong. If he did it with other broker's clients, than it is illegal and he could be in big trouble.

Basically, high end financial advisors and their employers have a large argument about who the clients "belong to".

Both the brokers and the employers claim the clients are THEIRS. Which means that when they quit their job, they each try to 'keep the clients'. The employers claim 'we gave you the leads that lead to that client', while the brokers claim "I spent 3 years building a relationship - even letting that client beat me at golf and I HATE golf."

The Employers do not for example tell the clients were the new broker went to, even if the clients ask. Instead, they often accuse the brokers (as in press legal charges and try for injunctions) and prevent them from talking to the clients after they quit. It's gets so bad that some employers might try to prevent a broker from talking to his own father, because they claim his father is a client of the Employer, not the broker.

The brokers often copy as much information as possible about their clients, not just phone numbers, but financial statements, etc. You need this information to give the clients real service. You can't tell all your clients with trust accounts about the new financial trust services at your new firm if you don't know which clients have trust accounts.

If the broker took someone else's clients, than he clearly broke the law. But if he simply copied records of people he had a relationship with - i.e. his own clients - then Morgan Stanley is simply being a douchebag company accusing him of violating privacy when THEY are the one violating the privacy.

Let's be honest here - the real truth is the CLIENT should be allowed to determine who they want to do business with. If the client wanted to do business with Morgan Stanley, then the broker should not keep their information - but it is reasonable for them to take it with them when they switch jobs as they can't tell the client they are quitting until after they quit and they need that information to attempt to make the sale.

If the Client wants to keep business with the Broker, than Morgan Stanley should delete all their information after the switch is made.