Commentary on InvestmentNews article by Bruce Kelly
A Lincoln Financial Network broker-dealer is on the hook for $650,000 to Finra over failures to safeguard thousands of client accounts against cyber breaches by foreign hackers, InvestmentNews writes.
Foreign IP Addresses Used to Hack Cloud Server
In addition, the industry’s self-regulator accuses the firm, Lincoln Financial Securities Corp., of failing to retain consolidated reports from the end of 2010 to the end of 2013, according to the publication.
The confidential data of around 5,400 customers of the broker-dealer has been hacked, according to Finra, InvestmentNews writes. The company allegedly failed to ensure the security of the systems from at least 2011 until 2015, according to the Finra settlement cited by InvestmentNews.
Hackers allegedly used foreign internet protocol addresses to access the firm’s cloud server that contained the sensitive information, which was being stored at their branch offices, according to the publication.
Lincoln Financial’s spokesman Michael Arcaro tells InvestmentNews that the matter is being looked into and supervisory procedures as well as security measures are being enhanced.
The firm has neither confirmed nor denied the allegations, writes the publication.
This isn’t the first time Lincoln Financial Securities has been in hot water over lax client data protection, according to the Finra settlement cited by InvestmentNews.
In 2011, the company was charged for a similar infraction in failing to have proper procedures in place to protect client data stored on its online portfolio management system, according to the publication. The firm settled for $450,000 at the time without admitting or denying Finra’s claims, InvestmentNews writes.
Posted by: The Trust Advisor