Hacking an e-mail account is a common thing now days. We need to be alert of Fund Transfers request via e-mail. It can inflict financial damage to the firm and the registered representative, this is something that can be avoided.
Reg. Rep. X (CRD #1234567, Registered Representative, Edison, New Jersey) was fined
$7,500 and suspended from association with any FINRA member in any capacity for 10
business days. The fine shall be due and payable on Reg. Rep. X return to the securities industry.
The sanctions were based on findings that Reg. Rep. X falsely attested that she had confirmed
a request for a fund transfer with a customer and as a result, caused her member firm’s
books and records to be inaccurate. The findings stated that Reg. Rep. X processed the fund
transfer request that she thought a customer had sent, but the transfer request was
actually sent by an imposter who hacked into the customer’s email. In order to finalize
the transfer of funds, and to accommodate what she believed in good faith to be the
customer’s wishes, Reg. Rep. X provided a false attestation in her firm’s electronic wire transfer
system. In reliance upon Reg. Rep. X’s attestation and the information the imposter provided, the
firm wired the funds from the customer’s account to the account the imposter specified.
The imposter requested a second transfer and at that point, Reg. Rep. X and the adviser she
assisted became suspicious. Reg. Rep. X and the adviser brought the incident to a branch manager
after they determined the signature on the letter of authorization (LOA) did not match the
customer’s signature on file. As a result, the firm investigated the incident and terminated
Reg. Rep. X based on her false attestation. Reg. Rep. X initially represented that she mistakenly checked
the box attesting that she had spoken with the customer and later volunteered that she did