The National Association of Securities Dealers is warning both investors and brokers to safeguard client information from high-tech fraudsters.
The regulator says that wireless technologies are posing new risks that confidential customer information will get into the wrong hands. In an investor alert, the NASD highlights the risks involved when transacting investment business online and outlines steps investors can take to prevent unauthorized access to their account information. A notice to members reminds brokerage firms that their systems, policies and procedures must adequately address the risks posed by current technologies.
“The Internet makes life a lot easier for investors on the go, but it also presents them with new and serious security concerns,” said NASD chairman and CEO Robert Glauber, in a release. “Investors have the responsibility to be vigilant when doing business on-line. But firms also have the responsibility to have the right policies and procedures in place to protect investor records and information. NASD’s job is to make sure those policies and procedures are in place and operating properly.”
The investor alert includes tips to help investors keep their information safe; it also addresses security issues surrounding the use of computers in Wi-Fi hotspots. It notes that these hotspots are becoming more common and pose significant security threats.
For firms, the NASD advises that while there can be no “one-size-fits-all” policy or procedure, each firm should, at a minimum, consider whether its existing policies and procedures adequately address technology currently in use; whether the firm has taken appropriate technological precautions to protect customer information; whether it is providing adequate training to employees regarding the use of available technology and the steps employees should take to ensure that customer records and information are kept confidential; and, whether the firm is or should be conducting periodic audits, to detect potential system vulnerabilities and to ensure that its systems are, in fact, protecting customer records and information from unauthorized access.
NASD issues fraud warning
Investor alert highlights risks involved in online transactions
- By: IE Staff
- July 28, 2005 July 28, 2005
- 16:30