Judge Orders Ex-Wells Broker to Return Breached Customer Data
(Corrects first paragraph to say a court ordered the data to be returned to it, not to Wells Fargo.)
Two judges on Wednesday ordered a former Wells Fargo Advisors broker and his lawyers to keep information they inadvertently received on thousands of the broker-dealer’s customers private, and one said the data must be immediately returned to the court for safekeeping.
Gary Sinderbrand and his lawyers, Aaron Zeisler and Andrew L. Miller, were enjoined from “any further review, use and/or dissemination” of the confidential information that a Wells attorney sent them on a CD by New Jersey Superior Court Judge Joseph L. Marczyk and New York State Supreme Court Judge Charles E. Ramos in separate restraining orders.
Marczyk also ordered the lawyers to destroy any copies of the data they have retained, and scheduled a full hearing on September 1.
Sinderbrand’s legal team last week received a CD that included social security numbers and account information on roughly 50,000 Wells Fargo Advisors clients, as well as production and compensation data on some advisors, according to a report on Friday in The New York Times.
The CD was sent by an outside bank lawyer in response to discovery requests from Sinderbrand, who is suing Wells and his brother, a current Wells broker, for $19 million in damages.
The restraining orders come amid a torrent of questions about potential liability for the data breach and about the ways that the former broker may be exploiting it.
Since the Times report, Sinderbrand has emailed two Wells Fargo Advisors executives requesting personal meetings to discuss the circumstances of his returning to the broker-dealer, according to exhibits attached to Wells’ filings for the restraining orders.
“Each day that Plaintiffs maintain the customer information there is a danger posted, amounting to irreparable harm, to Wells Fargo’s customers,” Angela Turiano, a lawyer at Bressler Amery & Ross in New York who is representing the broker-dealer, wrote in support of the restraining order. “Plaintiffs’ escalation of an issue, including the involvement of the press, which could have and should have been resolved with a simple return of the CD, is reprehensible and indicative of their true motives here—to improperly malign Wells Fargo and gain what they perceive to be a tactical advantage in the pending litigation.”
Turiano herself has attributed her error in sending the CD on the complexities of dealing with an unnamed outside document vendor and a “misunderstanding of the complex interfaces with the process employed.”
Turiano referred a request for comment to Wells Fargo.
“We are very pleased that two courts agreed with our right to retain control of our client data,” a spokeswoman for Wells Fargo said in an e-mailed statement. “The data in question was shared inadvertently with Mr. Sinderbrand’s attorneys in response to a legal subpoena and, when opposing counsel would not immediately return this disk consistent with legal practice and code, we sought swift legal relief.”
Miller, Sinderbrand’s lawyer in New Jersey, said neither the broker nor his lawyers have shared any sensitive client information with outsiders and do did not intend to do so. “The information is 100% secure,” he said.
Sinderbrand’s lawsuits stem from the “book” shared with his brother, Steven, at a Wells Advisors office in New York City. The former broker, who in 2013 took a two-year leave of absence to start a medical software business and devote time to an ill family member, sued the bank and his sibling damages in New York in April for over $19 million in compensatory damages related to “consulting” services during his sabbatical.
He filed a lawsuit against his brother in New Jersey in October 2016.
His New York complaint charges that Wells planned to rehire him but “abruptly reversed course” in October 2015.
Papers that Wells submitted to support its request for a restraining order say Sinderbrand as late as last Thursday was contacting brokerage firm executives to work out a deal.
“I am aware that you…were willing to take me back despite concerns of the Compliance Team,” Sinderbrand wrote in an email to Wells Advisors regional manager Michael J. Carroll last Thursday, according to a document submitted to the New York court. “It is by virtue of your actions that I am reaching out to you directly to give you the opportunity to take any action you may deem appropriate.”
A second email sent on Sunday, July 23, to Jonathan Weiss, head of Wells Fargo Corp’s wealth and investment division, said: “I strongly believe that if you and I meet asap, we can find a solution acceptable to both parties.”
“This case is an especially egregious one,” Turiano, the outside Wells lawyer, wrote the New York court in support of the TRO.
“Not only did the attorneys—who instantly recognized the potential implications of confidentiality and privilege—fail to honor their ethical and legal obligations to immediately return the confidential information, but they released the materials directly to their client, who, without skipping a beat, then dispatched the materials to The New York Times.”
Zeisler did not return a request for comment.
—Jed Horowitz contributed to this story.