Compliancex

Cases of investor funds being stolen through hacked email are on the rise, the Financial Industry Regulatory Authority said in a warning to both investors and firms Thursday.

Wall Street’s self-regulator said it has gotten an increasing number of reports of investors’ money being stolen by fraudsters who gain access to the investor’s email and then send instructions to a firm to transfer money out of the investor’s brokerage account.

In some cases, the perpetrators appear to have gotten the investor’s brokerage information by searching contact lists in the investor’s email account or emails in the “sent” folder, Finra said in its investor alert.

The fraudster then usually uses the investor’s personal email account to send instructions to the broker or firm to wire funds to a third-party account, often overseas, Finra said. The instructions may be accompanied or followed by a fake letter of authorization, which is also emailed from the hacked account.

Click link to view full article at The Wall Street Journal

Caitlin Nish, The Wall Street Journal, January 26, 2012