A proposed class action lawsuit has been filed against the Vanguard Group over the alleged sharing of client data with third parties, according to ThinkAdvisor.
Two Vanguard clients, Brian Felsen and Matthew Ragusano, filed the suit recently in U.S. District Court in Philadelphia, claiming Vanguard shared their sensitive personal data with companies such as Google, LinkedIn, and Meta without their knowledge and consent. The plaintiffs said that Vanguard installed technologies to track the clients’ investment activities and have the information transmitted to the outside parties for targeted advertising purposes. The clients said they were bringing the suit on behalf of all Vanguard accountholders who access their accounts on the company’s website and mobile application “due to Defendant’s practice of surreptitiously disclosing sensitive and confidential financial information of its accountholder to third parties.”
This alleged action allowed the outside companies to build profiles based on the customers’ web habits. Vanguard is accused of violating federal electronic communications privacy law, Pennsylvania’s wiretapping and electronic surveillance control act, and California invasion of privacy law.
“When a user logs in to their account and selects investments, every selection the user makes is tracked through the page URL, which identifies a purchase is being made and which fund or stock is being purchased. Through the trackers installed on the Website, the Third Parties intercept all responses entered by users, in real time,” the complaint alleges, going on to say, “For example, LinkedIn and Google intercept each stage of a user’s selection of Domestic Stock for investment, the ticker name, and the action the user is taking with this investment.”
According to Felsen and Ragusano, clients must provide private information such as their email, birth date, Social Security number, gender and home address to use Vanguard’s platforms, and unbeknownst to the clients, this information then becomes available to the third parties, along with their activity on those platforms. For example, the clients’ so-called “click events” were recorded and intercepted by LinkedIn through the technology embedded on Vanguard’s website and app.
“Click events detail information from the Website and App including personal information from account creation, the type of account opened, queries in the search box, ticker symbol, and action taken along with an identifier used to track the visitor’s identity across websites,” the suit alleges. LinkedIn incorporated the information it intercepted from Vanguard into its marketing tools to fuel its targeted advertising service, plaintiffs say. They add that Google and Meta also used their technology to extract information and track activity on Vanguard clients.
Vanguard is accused of depriving clients of their privacy rights with a system that “surreptitiously tracked, recorded, and transmitted Plaintiffs’ and other online users’ confidential communications, personally identifiable information, and sensitive financial information.” Felsen and Ragusano said they “bring this action for legal and equitable remedies resulting from these illegal acts.”
Vanguard representatives didn’t immediately respond to an emailed request for comment.
The attorneys at Lewitas Hyman include former senior attorneys at the SEC whose legal experience and industry knowledge make them uniquely qualified to provide counsel on securities regulatory, compliance and enforcement matters. Our attorneys fully understand the regulatory scrutiny financial professionals and their firms face from the various regulators that oversee the financial services industry. If your firm is facing an investigation from a regulatory agency, please contact Lewitas Hyman at (888) 655-6002 or through our online contact form.
