Morgan Stanley Data Breach Probe: Hacker Responsible? - Analyst Blog

The probe surrounding the leakage of Morgan Stanley's ( MS ) client data on internet sites along with the offer of sale of the data took a new turn. The authorities are now investigating the possibility of this being the handiwork of a hacker instead of the concerned financial advisor of the company who was terminated. The news was first reported by TheWall Street Journal .

Last month the company disclosed that information regarding nearly 10% or 350,000 of its wealth management clients was stolen by one of its employees, with some of it even posted online. The company fired Galen Marsh - the adviser in question -- and notified regulatory bodies and law enforcement agencies including the FBI and the Financial Industry Regulatory Authority ("FINRA") about the breach.

Marsh who obtained the data and stored in his personal computer, has denied online publication of data or putting it up for sale. The authorities are enquiring whether hackers targeted Marsh after he acquired the data from his computer in the bank.

Stolen data included account names and numbers as well as size of accounts and certain transaction information, while other sensitive information like account passwords and social security numbers were not divulged. Though the data theft did not generate any economic loss to any of its clients, stealing and posting of data (account names and numbers) online remains a serious breach of Morgan Stanley's cyber security program.

Client's account information had appeared in sites Twitter ( TWTR ) and Pastebin. Following the data breach, Morgan Stanley ensured removal of such data and has been informing all the affected clients. When the company detected further online postings, it acted again to remove those postings. The process of altering the account numbers of the customers is presently underway. Also, the company is providing credit and identity-theft protective services to the concerned clients.

While the ongoing probe has not led to any arrests and the hacker remains at large, we look forward to the efforts of the authorities to haul in the wrongdoers.

Currently, Morgan Stanley carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the finance space include Customers Bancorp, Inc. ( CUBI ), Provident Financial Holdings, Inc. ( PROV ) and BGC Partners, Inc. ( BGCP ). All three stocks sport a Zacks Rank #1 (Strong Buy).

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MORGAN STANLEY (MS): Free Stock Analysis Report

BGC PARTNRS INC (BGCP): Free Stock Analysis Report

PROVIDENT FINL (PROV): Free Stock Analysis Report

TWITTER INC (TWTR): Free Stock Analysis Report

CUSTOMERS BANCP (CUBI): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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