Unfortunately over the years, clients of major brokerage firms have had funds stolen or otherwise converted from their accounts. Sometimes, the funds stolen are from a financial advisor, Other times it is a family member or friend. Sometimes, it is a complete stranger. FINRA just issues a Notice to Members this week warning brokerage firms about these risks.
Finra issued Regulatory Notice 12-05: Verification of Emailed Instructions to Transmit or Withdraw Assets From Customer Accounts. According to the Release: "FINRA has received an increasing number of reports of incidents of customer funds stolen as a result of instructions emailed to firms from customer email accounts that have been compromised. These incidents highlight some of the risks associated with accepting instructions to transmit or withdraw funds via email. FINRA recommends that firms reassess their policies and procedures to ensure they are adequate to protect customer assets from such risks." The entire release can be viewed at the link below.
This release will likely be very important in future FINRA arbitration claims and lawsuits where the clients have had funds stolen from their account. To learn more about how these losses can be recovered, please contact us.
http://www.finra.org/Industry/Regulation/Notices/2012/P125463
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