A fired Morgan Stanley (MS) financial adviser accused of stealing client data never intended to sell the information and “is extremely sorry for his conduct,” his lawyer said.
Galen Marsh, 30, “acknowledged that he should not have obtained the account information and has been cooperating with Morgan Stanley to protect the firm and its customers,” his lawyer, Robert C. Gottlieb of Gottlieb & Gordon LLP, said today in a phone interview.
Marsh, who joined the bank in 2008 and worked in New York, was dismissed last week, said a person briefed on the matter who asked not to be identified discussing an investigation.
Information for as many as 350,000 wealth-management clients was stolen. The firm alerted law enforcement and found no evidence that customers lost any money, New York-based Morgan Stanley said in a statement. The bank said it detected account information for
about 900 clients on an external website and “promptly” had it removed.
“Mr. Marsh did not sell nor ever intend to sell any account information whatsoever,” Gottlieb said. “He did not post the information online. He did not share any account information with anyone nor use it for any financial gain. He is devastated by what has occurred and is extremely sorry for his conduct.”
Gottlieb declined to comment on why his client obtained the data.
FBI Investigation
The bank said it’s notifying all potentially affected clients, which represent about 10 percent of its wealth-management customers, and enhancing security on those accounts. The Federal Bureau of Investigation’s New York office is investigating the incident, according to a person familiar with the matter.“Morgan Stanley takes extremely seriously its responsibility to safeguard client data, and is working with the appropriate authorities to conduct and conclude a thorough investigation of this incident,” the company said in the statement.
The information didn’t include passwords or Social Security numbers, according to the statement. Bank account and credit-card data also weren’t compromised, according to a person briefed on the bank’s investigation. The firm disabled the application used to access the data, the person said.
The inquiry found the employee may have been seeking to sell the stolen information, though there was no evidence any third party received it, the person said.
‘Rapidly Discovered’
Someone posted a notice on the website Pastebin last month, offering Morgan Stanley account records including passwords, the New York Times reported, citing an unidentified person briefed on the matter. E-mail addresses on the listing don’t appear to be linked to Marsh, it said. A later posting included a sample of data, asking potential buyers to pay with Speedcoins, a virtual currency, the paper said.A bank spokesman didn’t immediately respond to a message seeking comment on the report.
“Our systems detected this crime and we rapidly discovered its perpetrator,” Greg Fleming, president of Morgan Stanley’s wealth-management division, said in a memo to employees. “While the situation is disappointing, it is always difficult to prevent harm caused by those willing to steal.”
Regulatory Pressure
Marsh joined Morgan Stanley as a sales assistant and was promoted to financial adviser last year, according to the person briefed on the matter. He previously worked at Bear Stearns Cos., according to Financial Industry Regulatory Authority records.He graduated in 2006 from Muhlenberg College in Allentown, Pennsylvania, where he played lacrosse, and went to Duke University’s Fuqua School of Business, according to his LinkedIn profile.
Regulators are pushing banks to be more vigilant about and hold capital against so-called operational risk, potential harm to a firm’s business or reputation from human error, external threats, fraud and litigation. A hacking attack against JPMorgan Chase & Co. last year compromised personal information of about 76 million households.
In 2011, Morgan Stanley’s brokerage unit said unencrypted compact discs containing tax information for 34,000 clients were lost in transit to the New York State Department of Taxation and Finance. The firm said at the time it found no evidence the data was misused.
Morgan Stanley fell 3.1 percent to $37.50 in New York, the most since October.
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