Pc Speak: Abney Associates Review, Keeping Swindlers Out of Your Bank and Brokerage Accounts

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PC Speak
Abney Associates Review Keeping, Swindlers Out of
Your Bank and Brokerage Accounts
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• Data breaches at Target and Neiman Marcus were
  certainly scary. Personal information from tens
  of millions of people fell into the hands of
  cybercriminals.
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• But an equally threatening and perhaps more
  personal attack is a hacker getting into your
  email and then using it to take money from your
  bank and brokerage accounts.
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• It is a problem that is increasing at all wealth
  levels, from individuals with small investment
  accounts to family offices that serve the
  wealthiest clients. Naureen Hassan, senior vice
  president of client experience at Charles Schwab,
  which is the largest custodian of independent
  advisers in the country, said the firm had seen a
  fivefold increase in email-related fraud over the
  last two years.
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• The biggest type of fraud we see is the
  fraudster takes over the persons email, and
  emails the adviser asking for urgent money, Ms.
  Hassan said. The other problem is related to
  clients storing signed pieces of paper in their
  email, which allows fraudsters to forge their
  signature.
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• One of the better-known cases involved a client
  of GW Wade, a Focus Financial Partners firm in
  Wellesley, Mass., that manages about 4 billion.
  The firm, which settled in October with the
  Securities and Exchange Commission, sent 290,000
  of a clients money in three separate wires to a
  foreign bank, in response to a hacker sending
  emails from the clients account requesting the
  transfers.
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• The S.E.C. accused GW Wade of not having
  adequate safeguards to prevent the thefts and
  fined it 250,000 for executing the transfers. In
  its censure of the firm, the agency required it
  to take remedial steps to increase data security.

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• When alerted to the situation, we took immediate
  action and ensured our client was never at
  financial risk, Neil Goldberg, a principal of
  the firm, said in a statement. Since then, we
  have put into place both new systems and
  procedures to prevent any similar occurrence.
•  Abney Associates Review
• While GW Wade ended up being penalized
  financially and took a reputational hit, its
  mistake served as a warning to other independent
  advisers eager to respond to client requests.
• A client of a Boston adviser said that he and his
  wife were traveling in Asia in the fall when
  their account was hacked and emails were sent to
  everyone at the advisers firm who had ever
  emailed him, asking for a wire transfer.
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• He said the adviser tried to contact him,
  unsuccessfully, and then reached out to his son
  to let him know what was happening.

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• They read my emails, and they mimicked my tone
  for requests for money, said the man, a retired
  financial services executive who requested
  anonymity. The whole system appeared to be more
  sophisticated than these notes from Nigeria.
• The Nigerian prince email swindle, in which a
  supposed royal offers riches in exchange for a
  bank account number, is to todays phishing scams
  what a Brother word processor from the 1980s is
  to a MacBook.
• A security executive at a trust company told of a
  hacker who got creative in trying to fool the
  firm. The executive, who requested anonymity,
  said the firm received an email from a clients
  account asking that 137,000 be wired to Italy to
  buy some art. He said this client was part of a
  large family that traveled frequently, so the
  request was not odd on its face. But he said the
  family had put a procedure in place in which no
  wires went out without a call being made to the
  person requesting the money.
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