This lawsuit alleges that Scottrade breached its fiduciary duties to account holders by failing to exercise reasonable security precautions and comply with industry standards for storing confidential and private personal information, in violation of California consumer and business statutes.
Missouri based online discount brokerage firm Scottrade, Inc. does business in all 50 states, with approximately 503 branch offices. To sign up for a Scottrade account, including brokerage, retirement, children’s college savings, and personal bank accounts, customers must provide certain personal and confidential information to Scottrade during the application process.
Personal and confidential brokerage customer account information is often used by identity thieves to commit various types of government fraud, such as obtaining a driver’s license or official identification card in the victim’s name but with the thief’s picture, using the victim’s name and SSN to obtain government benefits and/or filing a fraudulent tax return using the victim’s information
According to the complaint filed by California resident Stephen Hine, federal authorities recently notified Scottrade that from late 2013 through early 2014, confidential contact information, including social security numbers, tax identification numbers, employer contact information, personal email addresses, and other sensitive data of about 4.6 million Scottrade customer was accessed in a massive data breach that was the result of an external criminal act.
On October 2, 2015, media outlets began reporting on the potential data breach affecting Scottrade’s millions of customers. Scottrade confirmed the breach on the same date and is reported to have stated it was beginning to notify investors who were potentially affected by the breach, some of whom were sent emails.
Hine’s October 2, 2015 suit (U.S. District Court for the District of California) seeks class action certification on behalf of himself, nationwide customers and a California subclass, and alleges that Scottrade failed to adequately safeguard its customers’ private and personal information in compliance with applicable statutes and industry standard business practices. The complaint seeks injunctive relief, including ordering Scottrade to obtain appropriate security as to comply with data protection regulations, damages, restitution, and other remedies, and to provide sufficient notice sufficient to reach all customers affected by the breach. The complaint further alleges that when Scottrade notified the affected customers of the breach by email, such notice was inadequate and vague, given the existing threat of the potential use of private customer information in stock scams, other financial frauds, and the sale the personal data on the black market.
Article Type: Lawsuit
Topic: Consumer
Most Recent Case Event
Scottrade customer sues for data breach
October 2, 2015
The complaint alleges that starting in late 2013, and continuing for several months and into early 2014, the confidential contact information, including social security numbers, tax identification numbers, employer contact information, personal email addresses, and other sensitive data, of about 4.6 million investors and customers of Defendant Scottrade, was accessed in a massive data breach that was the result of an external criminal act.
scotttrade_databreach.pdfCase Event History
Scottrade customer sues for data breach
October 2, 2015
The complaint alleges that starting in late 2013, and continuing for several months and into early 2014, the confidential contact information, including social security numbers, tax identification numbers, employer contact information, personal email addresses, and other sensitive data, of about 4.6 million investors and customers of Defendant Scottrade, was accessed in a massive data breach that was the result of an external criminal act.
scotttrade_databreach.pdf