City National Reports Loss of Data Tapes

City National Bank, the Beverly Hills-based “banker to the stars,” said Tuesday that a data-security firm had lost or destroyed backup tapes containing personal and financial records of an undisclosed number of the bank’s customers.

Iron Mountain Inc. lost two data tapes with clients’ names, Social Security numbers, account numbers and other information while transporting them for storage April 28, bank executives said.

Local law enforcement officials and the U.S. Secret Service found no evidence that identity thieves obtained the confidential material or that it had been misused in any way, City National said.

The bank, a subsidiary of City National Corp., focuses on small and medium-sized businesses and affluent individuals. It was dubbed “banker to the stars” because of a large number of clients in the entertainment industry.

In a letter to affected customers, Executive Vice President Jan Cloyde said the bank was “confident that this is a case of lost or destroyed materials, not theft.”

The letter, dated June 20 and released Tuesday, said neither the tapes nor the boxes they were in had external markings connecting them or the bank. The data are stored in a format that is difficult to retrieve without special skills, software and equipment, the letter added.

Executives at Boston-based Iron Mountain, which calls itself “the world’s trusted partner for records management and data protection,” didn’t respond to requests for comment. A Secret Service spokesman declined to comment, saying the case was still being investigated.

A computer-services company working for City National had hired Iron Mountain to provide backup storage of records as required by law, bank spokeswoman Linda Mueller said.

Mueller wouldn’t disclose the number of customers whose information was lost. She said the company delayed notifying clients for fear that releasing the information earlier might impede the investigations.

Cloyde told the customers that the chance of anyone accessing their information improperly was “extremely remote” and said City National “would of course make restitution” if the incident caused anyone to lose money.

The theft or loss of financial data has become a major concern of privacy advocates and financial services companies. In an incident reported last month, hackers infiltrated computers at a Tucson credit card processing center and stole as many as 40 million card numbers.

“Clearly, information security is a growing concern throughout businesses everywhere,” Cloyde wrote, adding that the bank was reviewing its vendors’ security procedures.