When Sensitive Information Goes Astray

Dec. 18, 2015 — Only a co-op’s board of directors should have access to shareholders’ confidential financial records. What should you do if those records get into the wrong hands?

Co-op boards have a fiduciary duty when it comes to dealing with personal information. “Clearly, sharing a shareholder’s personal financial information with a non-board member would not be in keeping with the fiduciary responsibilities,” real estate lawyer Jeffrey S. Reich tells The New York Times’ Ask Real Estate column.

Sharing such sensitive information would be cause for removal from the board. An aggrieved shareholder could also sue the board for damages, but that would require proof that a specific board member leaked the information and that the plaintiff suffered damages, Reich says.

To prevent such mishaps, boards can adopt a policy requiring all board members to keep financial information private. Boards can take the added step of ordering their managing agent to remove personal information, such as Social Security numbers, from documents the board reviews in the future.