
Stockbrokers fined £77k
Losses and Lawsuits
LONDON - The UK Financial Services Authority (FSA) has fined stockbroking firm Merchant Securities Group £77,000 for failure to protect its customers from the risk of identity fraud. It is the first time the UK regulator has fined a stockbroker for data security issues.
The regulator says Merchant Securities had inadequate telephone procedures for verifying customers' identities. In fact, the firm relied on recognising customers' voices over the phone and talking to them about informal matters such as hobbies and holidays. Personal account numbers, meanwhile, which could be used together with a customer's name, to access account information, were included in routine letters. The FSA also revealed that unencrypted back-up tapes upon which customer information was stored, were kept overnight at an employees home, while staff were allowed free access to personal messaging and web-based email services in the workplace.
The FSA discovered the failings in September 2007 during a visit to the firm as part of wider thematic research into how firms managed data security risks. There have been no known cases of identity theft related to the matter.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe
You are currently unable to print this content. Please contact info@risk.net to find out more.
You are currently unable to copy this content. Please contact info@risk.net to find out more.
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Printing this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@risk.net
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Copying this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@risk.net
More on Regulation
HKMA launches consultation on green taxonomy
Regulator could use proposal to assess progress of banks towards climate goals
After SVB downfall, EBA stress test seeks out unrealised losses
European regulator asks for data on the fair value and sensitivity of bonds and their hedges
EU banks fear Brexit battle over FRTB internal models
Bank of England approach looks easier, but that may not make much difference to model uptake
Europe’s new IRRBB test: the riddle with no answer
A proposed compromise on net interest income test is not scientific, but exact calibration may be impossible
Eurex clearing chief calls for active account carve-outs
Isda AGM: Müller says EU clearing thresholds should exempt market-making and US client trades
The regulator that troubleshoots first, asks questions later
Canada’s bank watchdog aims to intervene early to tackle burgeoning risks, even at the expense of “perfect” regulatory decisions
Banks dispute EBA’s new threshold for IRRBB test
Banks say new proposal for identifying outliers on net interest income is still too severe
Investor wish-list offers no quick fix for Swiss CoCos
Some want bond doc overhaul to clarify bail-in risk, but sovereigns can always change the rules