Gottschall, Director of the SEC’s Denver Regional Office in a statement. “Across the financial services industry, we have seen a large increase in attempts by outside bad actors to gain unauthorized access to client accounts,” said Kurt L. Last month, the regulator settled charges with GWFS Equities, a subsidiary of Great-West Lifeco Inc.įor failing to report suspicious activity reports related to increasing attempts by bad actors to take over customer accounts. The Security and Exchange Commission has also been watching this phenomenon closely and holding brokerage firms accountable for not closely monitoring fraudulent activity. This trend was “in part due to the proliferation of mobile devices and applications, and the reduced accessibility of firm’s physical locations due to the COVID-19 pandemic.” “Customer account-takeovers have been a recurring issue, but reports to FINRA about such attacks have increased as more firms offer online accounts, and as more investors conduct transactions in these accounts,” FINRA said in its regulatory note. The second factor is the COVID-19 pandemic. It becomes relatively easy for bad actors to discover their login credentials because many people use the same password combinations to access multiple accounts.
“įINRA points to two factors that are driving the increase in account-takeover attempts, with the first being rapid growth in use of online and app-based brokers, which enable hackers to break into brokerage accounts by using username and password data bought from darknet marketplaces. He told that account-takeover prevention is a $15 billion market that is “growing significantly year-over-year. Ari Jacoby, chief executive and co-founder of cybersecurity firm Deduce, backed up this statement with data showing that account-takeover fraud increased by roughly 250% from 2019 to 2020.
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