Elvey v. TD Ameritrade, Inc.

Filing 27

Declaration of DAVID HALE in Support of 26 Memorandum in Opposition TO PLAINTIFFS' MOTION FOR PRELIMINARY INJUNCTION AND MOTION FOR CLASS CERTIFICATION filed byTD Ameritrade, Inc.. (Attachments: # 1 Exhibit 1# 2 Exhibit 2)(Related document(s)26) (Rubin, Lee) (Filed on 8/23/2007)

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Elvey v. TD Ameritrade, Inc. Doc. 27 Case 3:07-cv-02852-MJJ Document 27 Filed 08/23/2007 Page 1 of 5 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 MAYER, BROWN, ROWE & MAW LLP LEE H. RUBIN (SBN 141331) SHIRISH GUPTA (SBN 205584) Two Palo Alto Square, Suite 300 Palo Alto, CA 94306 Telephone: (650) 331-2000 Facsimile: (650) 331-2060 lrubin@mayerbrownrowe.com sgupta@mayerbrownrowe.com Counsel for Defendant TD AMERITRADE, Inc. UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA SAN FRANCISCO DIVISION MATTHEW ELVEY, an individual, and GADGETWIZ, INC., an Arizona corporation, on their own behalf and on behalf of all others similarly situated, Plaintiffs v. TD AMERITRADE, INC., a New York corporation, and DOES 1 to 100, Defendants. Case No. C-07-2852 MJJ DECLARATION OF DAVID HALE IN SUPPORT OF OPPOSITION TO PLAINTIFFS' MOTION FOR PRELIMINARY INJUNCTION AND MOTION FOR CLASS CERTIFICATION Judge Martin J. Jenkins Date: September 18, 2007 Time: 9:30 a.m. Location: Courtroom 11, 19th Floor DECLARATION OF DAVID HALE IN SUPPORT OF OPPOSITION TO PLAINTIFFS' MOTION FOR PRELIMINARY INJUNCTION AND MOTION FOR CLASS CERTIFICATION CASE NO. C 07 2852 MJJ Dockets.Justia.com Case 3:07-cv-02852-MJJ Document 27 Filed 08/23/2007 Page 2 of 5 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Pursuant to 28 U.S.C. 1746, I, David Hale, hereby declare and state as follows: 1. I am over the age of eighteen and am fully competent to make this declaration. I am Chief Privacy Counsel of TD AMERITRADE, Inc. ("TD AMERITRADE" or the "Company"), and I make this declaration based upon personal knowledge and information supplied to me by other Company employees who have personal knowledge. 2. Attached hereto as Exhibit 1 is a true and accurate copy of the current TD AMERITRADE's Client Agreement. Attached hereto as Exhibit 2 is a true and accurate copy of TD AMERITRADE's Privacy Statement. 3. In 2006, the Securities Exchange Commission ("SEC") conducted an examination of TD AMERITRADE's compliance with Regulation S-P, Privacy of Consumer Financial Information, implementing privacy rules promulgated under Section 504 of the Gramm-Leach-Bliley Act. 17 C.F.R. Part 248. The SEC has not reported any failures of TD AMERITRADE to comply with regulatory standards. 4. In January 2007 in connection with its examination of TD AMERITRADE, the Financial Industry Regulatory Authority ("FINRA") reviewed TD AMERITRADE's Privacy Statement and privacy policies and procedures and has not reported any failures to comply with regulatory standards. 5. TD AMERITRADE has been conducting an internal investigation of possible unauthorized acquisition of customer e-mail addresses from TD AMERITRADE's computer systems and has notified the FINRA of its investigation. More than 12 employees have been working on the investigation. 6. On Sunday August 19, 2007, there was a significant development in the investigation. TD AMERITRADE is currently evaluating the newly discovered information and intends to confer with its regulators regarding the matter. -1DECLARATION OF DAVID HALE IN SUPPORT OF OPPOSITION TO PLAINTIFFS' MOTION FOR PRELIMINARY INJUNCTION AND MOTION FOR CLASS CERTIFICATION CASE NO. C 07 2852 MJJ Case 3:07-cv-02852-MJJ Document 27 Filed 08/23/2007 Page 3 of 5 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 7.. To date, TD AMERITRADE has found no evidence that an unauthorized person acquired information concerning customer social security numbers; drivers license numbers; California Identification Card numbers; or any required security code, access code, or password that would permit access to an individual's financial accounts. 8.. TD AMERITRADE periodically receives requests for special restrictions to be placed on an account for a variety of reasons, including suspicion of identity theft. Identity theft can occur in many different ways. TD AMERITRADE has no evidence linking these notices to any data disclosed by TD AMERITRADE. Furthermore, there is no pattern of increasing numbers of such requests during the period from October 2006 to the present. There have been 334 such requests for calendar year 2007 to date, many of which are specifically tied to known other sources of identity theft, such as lost wallets. TD AMERITRADE currently has over 6 million customer accounts. 9. The SEC has in the past directed TD AMERITRADE to stop processing orders to purchase certain stocks that the regulators believe are the subject of spam messages that may be intended to artificially inflate the price of the stock. TD AMERITRADE has promptly complied with such directions. It would be costly and extremely difficult for TD AMERITRADE to attempt to identify all stock spam events and provide timely notice to all customers interested in purchasing such stock that the stock is the subject of a spamming event. Also, not all orders placed with TD AMERITRADE are placed online. Many orders are placed over the phone through an automated telephone order entry system, and many customers also place electronic orders through third party applications which would not have the ability to process the alert information. 10. Since Plaintiffs have not specifically described the scope or level of detail they are proposing for the accounting they request or their proposal for additional security measures, -2DECLARATION OF DAVID HALE IN SUPPORT OF OPPOSITION TO PLAINTIFFS' MOTION FOR PRELIMINARY INJUNCTION AND MOTION FOR CLASS CERTIFICATION CASE NO. C 07 2852 MJJ Case 3:07-cv-02852-MJJ Document 27 Filed 08/23/2007 Page 4 of 5 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 it is not possible to provide a reasonable estimate of the amount of work that would be required or the cost of the project. However, TD AMERITRADE expends millions of dollars each year on matters related to information security. 11. TD AMERITRADE has stopped advising its customers to delete spam e-mails on their computers. The only reason TD AMERITRADE initially gave such advice was to reduce the risk that customers' computers might be damaged by viruses that could be embedded in the spam e-mail. 12. TD AMERITRADE has not deliberately disclosed customer e-mail addresses or other customer personal information to any unauthorized persons. Dated: August 23, 2007 /s/ David Hale Pursuant to General Order No. 45, Section X(B), Lee Rubin hereby attests that David Hale concurs in the filing of this document. -3DECLARATION OF DAVID HALE IN SUPPORT OF OPPOSITION TO PLAINTIFFS' MOTION FOR PRELIMINARY INJUNCTION AND MOTION FOR CLASS CERTIFICATION CASE NO. C 07 2852 MJJ Case 3:07-cv-02852-MJJ Document 27 Filed 08/23/2007 Page 5 of 5 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -4DECLARATION OF DAVID HALE IN SUPPORT OF OPPOSITION TO PLAINTIFFS' MOTION FOR PRELIMINARY INJUNCTION AND MOTION FOR CLASS CERTIFICATION CASE NO. C 07 2852 MJJ

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