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Wall Street’s big banks are lousy with highly educated people yanked from among the top performers at the world’s best business schools and universities. They are elite and powerful. And sometimes, like every human, they do very dumb things.
Here’s the deal: Morgan Stanley just got slapped with a $35 million fine for “astonishing” failures that led to the mishandling of sensitive data on some 15 million customers, my colleague Matt Egan writes.
The mistake? Tossing out old computers without wiping the hard drives.
In one episode described by the Securities and Exchange Commission, Morgan Stanley hired a moving company — which had “no experience or expertise” in data destruction — to decommission thousands of hard drives and servers holding customer data.
That company later sold thousands of those devices, some of which contained personal identifying information, to a third party. Eventually, the devices, still loaded up with sensitive data, wound up on an auction site.
The SEC didn’t mince words in laying out Morgan Stanley’s missteps.
Its “failures in this case are astonishing,” Gurbir Grewal, director of the SEC’s enforcement division, said in a statement. “If not properly safeguarded, this sensitive information can end up in the wrong hands and have disastrous consequences for investors.”
So, yeah, it was pretty dumb. But it’s important to note the SEC’s not alleging anything criminal did happen, just that it could have.
Morgan Stanley agreed to pay the fine without admitting or denying the findings in the settlement.
“We have previously notified applicable clients regarding these matters, which occurred several years ago, and have not detected any unauthorized access to, or misuse of, personal client information,” Morgan Stanley said in a statement.
Another way to put that is: We got lucky and no bad actors managed to exploit the data we carelessly released to the public, as far as we know.
Free advice for next time, y’all: Call tech support! We can all be luddites, guys — it’s nothing to be ashamed of.
We’re three-fourths of the way through 2022, and the 2020 hangover is still hobbling the auto industry.
Here’s the deal: Ford is now stuck with as many as 45,000 large pickups and SUVs that it can’t finish because, well, it doesn’t have all the parts…sound familiar? It should, because it’s been going on for more than two years.
The company warned late Monday that shortages and rising prices of supplies will cost it an extra $1 billion this quarter. Shares of Ford fell 12% Tuesday.
The $25 trillion dollar question of the year has been some variation on a) are we in a recession yet? and b) how bad will it be?
We’ve had a really fun time trying to explain why the US isn’t in a recession, technically speaking, right now, even after two back-to-back quarters of negative growth. ICYMI: That oft-cited guideline has a bunch of caveats, and isn’t a hard-and-fast rule. And anyone looking at the current labor market, with near-record-low unemployment, as well as resilient consumer spending, wouldn’t logically call this a recession.
That doesn’t mean the fears have gone away.
Take FedEx, which led a massive selloff late last week when it slashed its guidance and warned of a global downturn. It isn’t alone. Earlier this month, the CEO of luxury home goods retailer RH (aka Restoration Hardware) said that “anybody who thinks we’re not in a recession is crazy” and added that the housing market is in a downturn that is “just getting started.” Best Buy’s CFO avoided the R-word, but employed the kind of business jargon — “current macro environment trends could be even more challenging” — that amounts to an alarm bell.
Chip equipment leader Applied Materials had some other euphemisms to freak investors out last month, saying some of its customers are in slowdown mode “as macro uncertainty and weakness in consumer electronics and PCs causes these companies to defer some orders.”
These are ominous signs, my colleague Paul R. La Monica reports. And there’s likely more to come as companies gear up for third-quarter earnings season next month.
Analysts and companies are already cutting their outlooks, raising the prospect that the third quarter could be the worst for earnings since 2020, when the pandemic shut down the economy.
So, yeah, it’s not great. But it’s not, like, 2008-level bad. And there is one potential bright spot, Paul explains. The housing market looks set to slow down, rather than crash a la the subrprime crisis of 07-08.
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