Scottrade Data Breach Class Action Lawsuit Filed

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New York, NY: A data breach class action lawsuit has been filed against the discount brokerage house Scottrade Inc, alleging the company failed to take adequate action to protect its customer' data. Scottrade announced last week that between late 2013 and early 2014 approximately 4.6 million users had their personal information, possibly including their Social Security numbers, targeted in a data breach.

Filed by plaintiff Stephen Hine, the lawsuit states that Scottrade was negligent in failing to exercise reasonable security precautions and failing to comply with industry standards for storing confidential and private personal information. Further, the suit alleges Scottrade' email notification to customers affected by the breach was "woefully inadequate and vague,"given that their information might be sold on the black market or used in stock scams and other financial frauds.

Specifically, the lawsuit states, "cottrade' actions and/or omissions occurred despite prior warnings, including prior incursions of their network by third parties, who conducted fraudulent stock trades using Scottrade' customer' accounts, and even fines from government agencies concerning its system' security procedures and oversight."

The plaintiff contends that had Scottrade heeded warnings and taken necessary precautions, the data breach could have been prevented or, at a minimum, predicted it much sooner and reduced the harm to its customers.

In its announcement, Scottrade stated that those responsible for the attack appeared to have targeted names and mailing addresses, but it couldn't rule out the possibility that email addresses and other "sensitive data"had been stolen.

The lawsuit goes on to allege that many of the customers affected won't receive email notifications from Scottrade as they have changed email addresses or used a different email address. Furthermore, the emails sent are materially misleading and don't fully disclose the scope of the threat to Scottrade' customers, the lawsuit states.

"The database accessed, however, contains, among other things, Social Security numbers, email addresses and other 'sensitive data' (which is not defined in the email),"the complaint states. "It is highly unlikely that the hackers, having access to the above information, would only take the affected customer' name and email address."

According to the complaint, as a financial institution and U.S. Securities and Exchange Commission registered broker dealer, Scottrade had a "special duty"to exercise reasonable care to protect and secure the personal and financial information of its customers.

"cottrade should have known to take precaution to secure its customers' data, given its special duty, especially in light of the recent data breaches affecting numerous retailers and financial institutions, as well as from prior direct breaches of its secured networks,"the complaint states.

Hine is represented by E. Elliot Adler of Adler Law Group APC, Timothy D. Cohelan and J. Jason Hill of Cohelan Khoury & Singer, and Geoff Spreter of Spreter Legal Services APC. The case is Hine v. Scottrade Inc., case number 3:15-cv-02213, in the U.S. District Court for the Southern District of California.

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Reader Comments

Posted by

I had about $25,000 stolen when I moved my brokerage account to another company. The Scottrade account had around $55,000 in it, but when the electronic money transfer was done, only about $26,000 was in my new account. I called Scottrade and was told they couldn’t help me. I called the police, and the officer said they had no way to find out who took the money and that I probably would never see that money again. Is it possible now that I might be able to recover the money?

Posted by

How do I join the lawsuit against Scoottrade?

Posted by

i feel my account was compromised leading to unexplainable losses in my portfolio.

Posted by

Dear Law Office,

My brokerage account at "Scottrade" was hacked. I do not know who the person was and how they logged into my account. Scottrade has a pending class action law suite about a data breach which may have contributed to this security breach. Back in 2014
4.6 million Scottrade customers had their personal information stolen.

As for my case, my account was accessed by someone. They transferred $180,000 dollars from my bank account electronically and lost it in the stock market. I reported it to Scottrade but they said its not their fault if someone hacked my account and accused me of giving my password to someone and blaming me for it.

I reported it to the police and they said they don't have enough information to catch the cyber criminal. Scottrade advised me to seek help of an experienced attorney to discuss my account and that they would no longer discuss my account with me any further.

Posted by

Scottrade sent me an email in October stating my account was one of many that had been hacked. I am concerned because I believe my information along with social security and possibly other sensitive information was stolen

Posted by

I have had an account with scottrade. Could my personal information been compromised as per the class action lawsuit?

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