Wells Fargo & Co., already in the regulatory spotlightbecause of last year’s fake-account scandal, is drawing renewedscrutiny after a lawyer’s unauthorized release of sensitive clientdetails for tens of thousands of accounts belonging to wealthycustomers of its brokerage unit.

Regulators have started asking questions about thebreach, according to a person with knowledge of the matter,after the data was mistakenly provided to an attorney as part of alawsuit involving two brothers, one a Wells Fargo employee and theother a former employee. A person briefed on the matter said WellsFargo has determined the accounts were all from one brokeragebranch in the Northeast.

Representatives of the Financial Industry Regulatory Authorityinformally contacted at least one of the attorneys involved in thedispute for information about how the breach occurred and how Wells Fargo failed todetect it, said the person, who asked not to be identified becausethe matter isn’t public. Lawyers for the bank are taking steps tocontact regulators about the data breach, according to anotherperson with knowledge of the matter. The person didn’t specifywhich agencies.

Ray Pellecchia, a spokesman for Finra, which licenses andsupervises Wall Street workers including financial advisers, didn’thave an immediate comment. Judith Burns, a spokeswoman for theSecurities and Exchange Commission, declined to comment.Representatives for the Consumer Financial Protection Bureau andthe Office of the Comptroller of the Currency didn’t immediatelyrespond to messages seeking comment.

‘THOROUGHLY INVESTIGATE’

While this latest black eye may not rise to the level of theretail-bank debacle, it further calls into question Wells Fargo’sability to manage its people and information.

“Wells Fargo takes the security and privacy of our customers’information very seriously," the bank said in a statement. "We arecurrently taking legal action to ensure the additional data is notdisseminated, and we are requesting its rapid return. Wecontinue to thoroughly investigate this matter and will take theproper steps, including corrective action, based on the outcome ofour investigation.”

The bank’s latest troubles come just 10 monthsafter regulators disclosed that Wells Fargo employees had beenopening potentially millions of accounts in its retail bankingdivision without customers’ permission over a half decade. Thebank’s stock valuation and reputation were tarnished, and WellsFargo has spent at least $520 million on fines, remediation,consultants and civil litigation since then, including a near-final$142 million to consumers who accused the bank of creating bogusaccounts.

INSUFFICIENT OVERSIGHT

The OCC, the bank’s main regulator, said in September WellsFargo had "failed to provide sufficient oversight" of its salesprograms and didn’t adequately monitor employees in its retailbank. Part of the consent order the OCC forced the bank to carryout afterward included beefing up internal controls and riskmanagement.

The recent data breach began with a financial spat between apair of brothers over less than $1 million. Gary Sinderbrand, aformer managing director at Wells Fargo Advisors, is engaged in twolegal actions against his older brotherSteven Sinderbrand, a managing director at the bank, onein New York and one in New Jersey.

Lawyers for Gary Sinderbrand received client names, SocialSecurity numbers and account balances earlier this month for50,000 Wells Fargo accounts, the New York Times firstreported, including one file with details on the holdings of a"well-known hedge fund billionaire" with at least $23 millioninvested.

PROTECTIVE ORDER

The trove of confidential client data was sent by attorneyAngela A. Turiano of law firm Bressler, Amery & Ross, who’srepresenting Wells Fargo in both of the disputes. Turiano sent theinformation without a protective order or confidentiality agreementbetween the parties.

Turiano, who indicated that an outside vendor was involved inthe information breach, asked the information be returned when GarySinderbrand’s attorneys informed her of the breach this week, theNew York Times reported. Turiano didn’t return messages for commenton Saturday.

Gary Sinderbrand’s lawyers had been seeking documents related toa squabble over allegedly unpaid fees for a consulting arrangementwith his brother. Sinderbrand alleges Wells Fargo knew about andapproved of a verbal arrangement that he provide risk-managementand client-retention coaching to his brother Steven, while GarySinderbrand took a two-year sabbatical from managing wealthyclients’ money.

The New York dispute is over what Gary Sinderbrand alleges isroughly $870,000 more he’s owed from 50 percent of fees his brothermade managing their joint book of client business over a period ofabout two years.

Andrew L. Miller and Aaron Zeisler, attorneys for GarySinderbrand, either declined to comment or didn’t immediatelyreturn messages on Saturday. The brothers didn’t return messagesseeking comment.

Copyright 2018 Bloomberg. All rightsreserved. This material may not be published, broadcast, rewritten,or redistributed.