Attorney General James and Multistate Coalition Secure $6.5 Million from Morgan Stanley for Failing to Protect Customer Data

 

Morgan Stanley to Pay New York $1.6 Million for Compromising the Personal Information of 1.1 Million New Yorkers

New York Attorney General Letitia James and a coalition of five attorneys general today reached a $6.5 million agreement with global financial services firm Morgan Stanley Smith Barney LLC (Morgan Stanley) for compromising the personal information of millions of customers nationwide. Morgan Stanley failed to decommission its computers and erase unencrypted data in certain computer devices that were later auctioned while still containing consumers’ personal information, including data belonging to 1.1 million New Yorkers. New York will receive $1,658,047 from today’s settlement and Morgan Stanley will be required to strengthen its data security measures.

“No one should have their personal information auctioned off without their knowledge because a company failed to take basic steps to erase it before selling their old computers,” said Attorney General James. “Today’s agreement requires Morgan Stanley to bolster its cybersecurity so consumers will never again have to risk their personal data unintentionally being sold at an auction. Companies, big and small, must all take their responsibility to protect their customers’ data seriously, and if they do not, my office will take action.”

Morgan Stanley hired a moving company with no experience in data destruction services to decommission thousands of hard drives and servers containing sensitive information of millions of its customers. Morgan Stanley failed to properly monitor the moving company’s work, and its computer equipment, some of which still contained private consumer information, was then sold at auction. Morgan Stanley was only made aware of the problem when a purchaser discovered the data and called the company.

In a second incident, Morgan Stanley discovered during a decommissioning process that 42 servers, all potentially containing unencrypted customer information, were missing. During this process, the company learned that the local devices being decommissioned may have contained unencrypted data due to a manufacturer flaw in the encryption software. The multistate investigation found that Morgan Stanley failed to maintain adequate vendor controls and hardware inventories, and that had these controls been in place, both data security events could have been prevented.

As a result of today’s agreement, Morgan Stanley has agreed to pay a $6.5 million fine and to adopt a series of provisions that better protects the personal information of its consumers going forward, including: 

• Maintaining a comprehensive information security program that includes regular updates that are necessary to reasonably protect the privacy, security, and confidentiality of personal information;
• Maintaining an incident response plan that documents incidents and responses;
• Maintaining a written policy that governs the collection, use, retention, and disposal of consumers’ personal information;
• Encrypting all personal information, whether stored or transmitted, between documents, databases, or elsewhere;
• Employing a manual process and automated tools to keep track of the locations of all hardware that contain personal information; and
• Maintaining a vendor risk assessment team to assess and ensure that vendors are in compliance with Morgan Stanley’s data security requirements.

Today’s agreement continues Attorney General James’ efforts to protect New Yorkers’ personal information and hold companies accountable for their poor data security practices. Last month, Attorney General James and a multistate coalition secured $49.5 million from cloud company Blackbaud for a 2020 data breach exposing the data of thousands of users. In September, Attorney General James reached an agreement with Marymount Manhattan College to invest $3.5 million to protect students’ online data. This past May, Attorney General James secured $300,000 from Sports Warehouse for failing to protect the data of 2.5 million customers. Also in May, Attorney General James recouped $550,000 from a medical management company for failing to protect patient data. In April, Attorney General James released a comprehensive data security guide to help companies strengthen their data security practices. In October 2022, Attorney General James announced a $1.9 million agreement with the owner of SHEIN and Zoetop for failing to properly handle a data breach that compromised the personal information of millions of consumers. In June 2022, Attorney General James secured $400,000 from Wegmans and required the retailer to improve data storage security after a data breach exposed consumers’ personal information.

Largest-Ever Counterfeit Goods Seizures Result In Trafficking Charges Against Two Individuals

 

Damian Williams, the United States Attorney for the Southern District of New York, Ivan J. Arvelo, the Special Agent in Charge of the New York Field Office of Homeland Security Investigations (“HSI”), and Edward A. Caban, the Commissioner of the New York City Police Department (“NYPD”), announced the recent seizures of approximately 219,000 counterfeit bags, clothes, shoes, and other luxury products with a total estimated manufacturer’s suggested retail price (“MSRP”) of approximately $1.03 billion.[1]  Two indictments were unsealed charging ADAMA SOW and ABDULAI JALLOH, a/k/a “Troy Banks,” with trafficking in counterfeit goods.  The defendants were arrested this morning and presented before U.S. Magistrate Judge Robert W. Lehrburger.  SOW’s case is assigned to U.S. District Judge Valerie E. Caproni.  JALLOH’s case is assigned to U.S. District Judge Paul A. Crotty.

 

U.S. Attorney Damian Williams said: “As alleged, the defendants used a Manhattan storage facility as a distribution center for massive amounts of knock-off designer goods.  The seizures announced today consist of merchandise with over a billion dollars in estimated retail value, the largest-ever seizure of counterfeit goods in U.S. history.  This is a testament to the commitment of this Office and its law enforcement partners to combat counterfeit trafficking in New York City.” 

HSI Special Agent in Charge Ivan J. Arvelo said: “Today's groundbreaking announcement underscores the unwavering commitment of HSI New York in the fight against intellectual property theft and serves as a testament to the dedication of our team and partner agencies, who have tirelessly pursued justice, culminating in the largest-ever seizure of this kind.  I extend my gratitude to all those involved for their relentless efforts and late nights dedicated to upholding the law.”

NYPD Commissioner Edward A. Caban said: “The trafficking of counterfeit goods is anything but a victimless crime because it harms legitimate businesses, governments, and consumers.  Today’s indictments show how seriously the NYPD and our federal partners take this offense.  And we will continue to work hard to hold accountable anyone who seeks to benefit by selling such items on the black market.”

According to the allegations contained in the Indictments and other publicly available information:[2]

From about January 2023, up to and including October 20, 2023, ADAMA SOW and ABDULAI JALLOH ran large-scale counterfeit goods trafficking operations out of a storage facility located in Manhattan.  JALLOH also trafficked counterfeit goods out of an offsite location in Manhattan.  Searches of premises controlled by SOW have resulted in the seizure of over 83,000 counterfeit items with a total estimated MSRP of over $502 million.  Searches of premises controlled by JALLOH have resulted in the seizure of over 50,000 counterfeit items with a total estimated MSRP of over $237 million.

A photograph of boxes of counterfeit goods seized from the storage facility is below.

A photograph of one of the storage units controlled by ADAMA SOW inside the storage facility is below.

A photograph of one of the storage units controlled by ABDULAI JALLOH inside the storage facility is below.

ADAMA SOW, 38, of Queens, New York, and ABDULAI JALLOH, 48, of New York, New York, are each charged with trafficking in counterfeit goods, which carries a maximum sentence of 10 years in prison. 

The statutory maximum penalty is prescribed by Congress and is provided here for informational purposes only, as the sentencing of the defendants will be determined by the judge.

Mr. Williams praised the outstanding work of HSI and NYPD.  He further thanked U.S. Customs and Border Protection for its assistance and the management of the storage facility in Manhattan for its cooperation with the execution of the seizures.

The cases are being handled by the Office’s General Crimes Unit.  Assistant U.S. Attorney Henry Ross is in charge of the prosecutions.

The charges contained in the Indictments are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

[1] The street value of counterfeit goods typically is significantly lower than the MSRP.

[2] As the introductory phrase signifies, the entirety of the text of the Indictments and the description of the Indictments set forth herein constitute only allegations, and every fact described should be treated as an allegation.

Permits Filed For 1678 Davidson Avenue In Morris Heights, The Bronx

 

Permits have been filed to expand a two-story structure into a four-story residential building at 1678 Davidson Avenue in Morris Heights, The Bronx. Located between West 174th Street and West 176th Street, the lot is near the 176th Street subway station, serviced by the 4 train. Isaac Kritzler is listed as the owner behind the applications.

The proposed 52-foot-tall development will yield 7,715 square feet designated for residential space. The building will have 17 residences, most likely rentals based on the average unit scope of 453 square feet. The concrete-based structure will also have a cellar, penthouse, and a 39-foot-long rear yard.

Nikolai Katz Architect is listed as the architect of record.

Demolition will likely not be needed as the permit calls for an expansion. An estimated completion date has not been announced.

Attorney General James Takes Historic Action Against PepsiCo for Endangering the Environment and Public Health With Plastic Pollution

 

Hundreds of PepsiCo Products Found Along Buffalo River, Jeopardizing the Environment and Public Health

AG James’ Lawsuit Charges PepsiCo with Harming the Public and Failing to Warn Consumers of Environmental and Health Threats of its Single-Use Plastic Packaging

New York Attorney General Letitia James today filed a historic and groundbreaking lawsuit against PepsiCo Inc. (PepsiCo) for harming the public and the environment with its single-use plastic packaging. The Office of the Attorney General (OAG) found that single-use plastic produced by PepsiCo contributes significantly to high levels of plastic pollution along the Buffalo River, pollution that is contaminating drinking water and harming wildlife. The lawsuit alleges that PepsiCo substantially causes public harm in Buffalo, has failed to warn consumers about the potential health and environmental risks of its single-use plastic packaging, and misleads consumers and the public about its efforts to combat plastic pollution. Through this lawsuit, Attorney General James seeks to require PepsiCo to end practices that threaten the environment and the public and to obtain disgorgement, civil penalties, and restitution for the damage inflicted upon New York’s communities and environment. 

“No company is too big to ensure that their products do not damage our environment and public health. All New Yorkers have a basic right to clean water, yet PepsiCo’s irresponsible packaging and marketing endanger Buffalo’s water supply, environment, and public health,” said Attorney General James. “No one should have to worry about plastics in their drinking water, plastic garbage littering their scenic riverfront, or plastic pollution harming wildlife. I will never hesitate to take on major corporations that put the health and safety of everyday New Yorkers and our planet at risk.”

PepsiCo’s Plastic Problem  

PepsiCo, which is headquartered in New York state, manufactures, produces, and packages at least 85 different beverage brands and 25 snack food brands that predominantly come in single-use plastic containers. Plastic packaging has become a persistent and dangerous form of pollution along the shores of the Buffalo River and in its watershed. In 2022, OAG conducted a survey of all types of waste collected at 13 sites along the Buffalo River and its tributaries and found that PepsiCo’s single-use plastic packaging was the most significant. Of the 1,916 pieces of plastic trash collected with an identifiable brand, over 17 percent were produced by PepsiCo. PepsiCo’s plastic packaging far exceeded any other source of this identifiable plastic waste along the river, and it was three times more abundant than the next highest contributor.  

From 2013 to 2022, approximately 78 percent of waste collected by Buffalo Niagara Waterkeeper volunteers in the Buffalo River watershed was plastic. Single-use plastic packaging for food and beverages, including food wrappers, plastic bottles, and bottle caps of the types produced by PepsiCo were found in significant amounts every year. Once in the environment, single-use plastic packaging quickly starts to break down and release dangerous microplastics.  

A nationwide study by the non-governmental organization Break Free From Plastic aggregated 2,125,415 items of plastic waste from 2,373 separate collections across the United States from 2018 to 2022. In each year, the study documented PepsiCo as either the number one or number two producer of branded plastic trash collected across the United States. Large quantities of microplastics have been found in the Buffalo River, and an analysis of those fragments has confirmed the presence of microplastics from snack food wrappers and polymers of the type used in PepsiCo’s plastic beverage bottles and bottle caps.

Mallard ducks feeding in a mass of floating waste.

 

Plastic waste collected in April 2022 from the Erie Basin Marina in the City of Buffalo, 

including Gatorade bottles and Lay’s potato chip packaging produced by PepsiCo.

 

Threats Posed by Plastic in the Environment 

Plastic pollution along the Buffalo River poses wide-ranging public health and environmental threats. The city of Buffalo sources its drinking water from Lake Erie, less than a mile from the mouth of the Buffalo River, and microplastics have been detected in the city’s drinking water supply. Microplastics have also been detected in fish species that are known to inhabit Lake Erie and the Buffalo River, many of which are food sources for the local community. Humans consume microplastics that contaminate our food and water. Once ingested, microplastics permeate deep into our bodies, blood, and organs, and can even be transferred through the placenta into unborn children. Exposure to microplastics and the chemicals they carry can cause a wide range of adverse health effects, from reproductive dysfunction to inflammation of the intestine and neurotoxic effects.  

In addition to negative effects on human health, research surrounding the impact of plastic and microplastic pollution shows negative impacts occurring on a wide range of species living in freshwater and terrestrial habitats due to exposure to various plastic polymers. Microplastics contaminate every level of the food web in the Great Lakes, and both plastic fragments and the chemicals they carry can bioaccumulate in freshwater species. At least 206 freshwater species have been found to ingest or become entangled in plastic, with many adverse and even lethal effects.   

OAG Legal Claims 

The lawsuit alleges that PepsiCo has significantly contributed to, and continues to contribute to, the existence of a public nuisance that injures the community living in the city of Buffalo and the environment. PepsiCo has also misled the public about the effectiveness of its plastic recycling and its efforts to combat plastic pollution. For example, PepsiCo’s statements have misled consumers and the public by creating the impression that the company was making meaningful progress toward reducing the use of non-recycled (virgin) plastic in its packaging, but no such progress is being made. On the contrary, for the last four years, PepsiCo’s use of virgin plastic has increased year by year. In 2022 alone, PepsiCo acknowledged that its use of virgin plastic in its plastic packaging increased by 11 percent. Attorney General James also charges that PepsiCo failed to warn its consumers about the risk of harm to human health and the environment posed by its packaging. PepsiCo’s failure to warn consumers and its misleading public statements violate New York General Business Law § 349 and New York Executive Law § 63(12). 

Through this lawsuit, Attorney General James is asking the court to require PepsiCo to cease contributing to the public nuisance it is causing in the Buffalo region, remediate the contamination it caused, and identify and implement measures to reduce the quantity of PepsiCo’s plastic packaging entering the Buffalo River. The lawsuit further seeks to stop PepsiCo from selling or distributing any product in the Buffalo region in single-use plastic packaging that does not contain an adequate warning. The lawsuit also seeks disgorgement, civil penalties, and restitution.   

“Our Buffalo community fought for over 50 years to secure hundreds of millions of dollars to clean up toxic pollution, improve habitat, and restore communities around the Buffalo River,” said Jill Jedlicka, Executive Director of Buffalo Niagara Waterkeeper. “As a Great Lakes city that has been oppressed for too long by the environmental damage left from our industrial hangover, we will not sit idly by as our waterways become polluted again, this time from ever-growing single-use plastic pollution. Buffalo Niagara Waterkeeper has coordinated annual shoreline sweeps for over 20 years, and single-use plastic bottles and wrappers constitute the majority of the items we collect. We are pleased to be able to contribute citizen science data to the actions taken by the New York State Attorney General, and we applaud her for holding producers accountable for this relentless assault on our environment and local waterways.”

Statement from Governor Kathy Hochul on Resumption of Service at Port Authority Bus Terminal

"I have been briefed on the suspicious package at the Port Authority Bus Terminal that has led to the evacuation of the terminal. Thanks to the efforts of the Port Authority Police and the NYPD, the suspicious package has been found and cleared from the area. Normal operations of the bus terminal are now resuming.

"We are grateful to our first responders for their speedy, effective response to this potential threat. Public safety is my top priority, and I will continue doing everything in my power to ensure New Yorkers have the safe, reliable transit service they deserve."

MAYOR ADAMS, UNION, FILM AND TV INDUSTRY PARTNERS BREAK GROUND ON NEW PRODUCTION CAMPUS IN QUEENS

 

Will Create More Than 1,500 Jobs, Build on Momentum in Film and TV Production Following End of SAG-AFTRA and WGA Strikes

 

Part of Mayor Adams’ “Working People’s Tour,” After City Set All-Time High Total Jobs Record and Recovered All of Nearly 1 Million Jobs Lost During Pandemic

Surrounded by labor leaders and partners from the film and TV industry, New York City Mayor Eric Adams today was joined by New York City Economic Development Corporation (NYCEDC) President and CEO Andrew Kimball, Mayor’s Office of Media and Entertainment (MOME) Commissioner Pat Kaufman, and East End Studios to break ground on a film and TV-ready production studio in Sunnyside, Queens that will create nearly 1,000 construction jobs and roughly 750 permanent, full-time jobs. The city’s film and TV production industry employs more than 185,000 New Yorkers.

The start of construction — which follows a similar milestone at another campus at Pier 94 Manhattan — kicks off the return of the city’s film and TV production industry, after the Screen Actors Guild-American Federation of Television and Radio Artists (SAG-AFTRA) and Writer’s Guild for America (WGA) ended their respective strikes this fall. It also marks a key stop on Mayor Adams’ “Working People’s Tour,” continuing to create jobs and power New York City’s economic recovery after the city set an all-time high job record with 4.7 million total jobs, recovering the nearly 1 million jobs lost during the COVID-19 pandemic.

“Thanks to SAG-AFTRA and the Writers Guild of America securing fair deals for their workers, film and TV production is back in New York City — helping more than 185,000 New Yorkers get back to work,” said Mayor Adams. “New York City is back, but our work is not done until every New Yorker has a pathway to success. We’re thrilled to see East End Studios bringing more than 1,500 jobs to the city and joining the ecosystem of successful local production spaces that are continuing to elevate Western Queens as a worthy rival of Hollywood.”

“As we continue our Working People’s Tour in celebration of hitting a new all-time job record in New York City, we are thrilled our unions and studios have reached agreements and we welcome the return of film and TV production — a vital component of New York City’s Economy,” said Deputy Mayor for Housing, Economic Development, and Workforce Maria Torres-Springer. “The East End Studios Sunnyside Campus will build on New York City’s strong foundation of local production facilities that keeps world-leading productions and a family-sustaining jobs in New York City.”

“NYCEDC celebrates the East End Studios Sunnyside Campus groundbreaking and is thrilled with the progress made on this new state-of-the-art film- and TV-ready production studio that was just announced over the summer,” said NYCEDC President and CEO Kimball. “With the development of the new East End Studios facility here in Queens, and the recent groundbreaking of Sunset Pier 94 Studios — the first purpose-built studio campus in Manhattan — last month, film and TV production continues to be a huge driver of New York City’s economy, providing good-paying jobs for New Yorkers across the five boroughs.”

“Today’s groundbreaking at the new East End Studios Sunnyside Campus is not only an indication of this city’s commitment to the future of our world-famous film and TV industry, but also a moment to celebrate the historic resolution of the 118-day SAG-AFTRA strike,” said MOME Commissioner Kaufman. “Combined with the recent expansion of the New York state film tax credit, today’s groundbreaking will serve as an economic driver for local businesses, create jobs for New Yorkers, and further our city’s reputation as a global creative capital.”

“New York City has profound unmet demand for best-in-class, fully integrated stage campuses. Our Sunnyside Campus will provide an elevated standard of workflow that doesn’t exist in any New York City stage at this time,” said Jonathon Yormak, founding partner, East End Studios. “East End Studios is exceptionally proud to participate in the city’s ever-growing place in the production landscape. We are honored to acknowledge today’s milestone with our valued partners at the New York City Economic Development Corporation, the New York City Industrial Development Agency, and the Mayor’s Office of Media and Entertainment.”

Rendering of the East End Studios Sunnyside Campus, set to be complete in early 2025.

The East End Studios Sunnyside Campus will be a 340,000-square-foot, Class A facility with three full-service, ground-floor soundstages totaling 75,000 square feet. The project also houses a 15,000-square-foot rooftop flex-stage that offers sweeping views of the Queens, Brooklyn, and Manhattan skylines. The stages are supported by 125,000 square feet of production, office, and mill spaces. Like all of East End Studios’ projects, the Sunnyside facility will be fully integrated with extended reality and virtual reality infrastructure, including the capability to shoot on a virtual stage and high-speed fiber connectivity with scalable production-level internet.

The project — with a total cost of approximately $275 million — is expected to be completed by the first quarter of 2025. The New York City Industrial Development Agency— which supports business growth, relocation, and expansion across the five boroughs by lowering the cost of capital investment — provided financial support.

New York City’s film and TV industry has grown significantly over the last decade, supporting 185,000 jobs, generating over $18 billion in wages, and contributing more than $82 billion in economic impact. After struggling during the pandemic, the city’s arts and entertainment sector continues to show positive momentum in its jobs recovery under the Adams administration — growing nearly 16 percent between May 2022 and May 2023 — and recovering nearly 46,000 jobs since the start of the pandemic.

“The WGA East is committed to supporting a film and television community that can thrive and create jobs here in New York,” said Lisa Takeuchi Cullen, president, Writers Guild of America (WGA) East. “Now that writing services are a qualified, covered expense under the New York State Film Tax Credit Program, we are hopeful that more writers' rooms will be located in New York, bringing more productions and filling soundstages like the new East End Studios Sunnyside Campus.”

"Theatrical Teamsters Local 817 is excited about East End Studios coming online,” said Tom O’Donnell, president, Theatrical Teamsters Local 817. “Its opening further cements New York City as the go-to location for episodic production.”

"I'm a proud graduate of the 'Made in NY' Production Assistant training program, which opened the door for me 11 years ago into New York City’s film and TV industry and I have never looked back," said Julian "Jay" Montoya, graduate, Made in NY. "Thank goodness that the strikes are over so that this new studio, located right here in Sunnyside, Queens, can provide opportunities for me to work."

Governor Hochul Announces Increased Enrollment Across SUNY Campuses

 

For First Time in a Decade, Year-to-Year Total System-Wide Enrollment Increased

Undergraduate First-Time Student Enrollment Up Across All Sectors, 4.3 Percent System-Wide from Fall 2022 to Fall 2023

SUNY’s Enrollment Data Can Be Found Here

Governor Kathy Hochul today announced increased enrollment across the State University of New York campuses. For the first time in a decade, year-to-year total system-wide student enrollment increased, up 1.1 percent overall from Fall 2022 to Fall 2023 for a total of 367,542 students. Undergraduate first-time enrollment – a leading indicator – was up across all sectors at 4.3 percent, a promising increase as SUNY works to fulfill the Governor’s vision to transform higher education into a path to upward mobility. The technology sector showed the strongest increase at 13.3 percent, followed by community colleges at 3.9 percent.

“New York continues to make important progress towards building the best public higher education system in the country and as a result, more young students are choosing SUNY,” Governor Hochul said. “I know firsthand that access to higher education is an engine for social mobility. That’s why I will continue to make important investments in our higher education systems and take steps to ensure college is affordable and accessible for students of all backgrounds.”

SUNY Chancellor John B. King, Jr. presented the enrollment data during a special meeting of the SUNY Board of Trustees. His presentation can be found at this link here, which provides a breakdown per sector and by campus.

SUNY Chancellor King said, “There is a place at SUNY for every New Yorker, and the great news is that more students across the state are discovering their SUNY success stories. Governor Hochul and the legislature have made a significant investment in higher education, and we are pleased to see more New Yorkers taking advantage of everything our campuses have to offer—an excellent and affordable education that can empower them to pursue their career and life goals. We will continue reaching out to students and adult learners across our state to ensure they know about the opportunities on our campuses and the financial aid available to help get them there.”