Cyber security remains an issue in the financial industry, as a major Wall Street technology provider got sued over allegations that the company's insufficient security, which led to the loss of $6 million in client's fund. Will more cases like this follow?
19 September, AtoZForex – A former client of SS&C Technologies, Tillage Commodities Fund, has sued the company for failing to prevent hackers from fleecing client funds. SS&C Technologies is a cloud-based provider of services and software for the financial services industry, headquartered in Windsor, Connecticut. The company served as the fund administrator of Tillage Commodities Fund.
Details: Why was the Wall Street technology provider sued?
According to the claim of a client, the China-based hackers deceived the SS&C Technologies by sending misleading emails to company’s employees in order to obtain client money. Consequently, almost $6 million of Tillage Commodities Fund money, New-York based hedge, money were fraudulently swiped through SS&C Technologies. Hence, the fund had to suspend its operations.
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Furthermore, the claim brought by Tillage Commodities Fund accuses its administrator, for disregarding its own protocol which led to the stolen funds. According to the hedge fund’s lawyers, SS&C employees did not manage to "exercise even a modicum of care and responsibility in connection with known and obvious cybersecurity threats." Also, the claim affirms that one of SS&C employees "directed the release of Tillage's funds oftentimes merely minutes after receiving the fraudulent wire requests."
Last week SS&C Technologies purchased Wells Fargo, a global fund services business. The fund services business is located in multiple locations including, London, Singapore, U.S. and Hong Kong.
CFTC's New Cyber Security rules
To prevent such cases, as the above-mentioned companies encountered, the U.S Commodities Futures Trading Commission (CFTC) has introduced new rules, aimed to fight cyber crimes. Based on the new rules, companies will have to examine their systems for cyber-vulnerabilities once a quarter. Also, firms will need to perform an annual breach recovery test. Furthermore, external auditors will have to be hired for conducting annual penetration testing to identify any vulnerabilities in the perimeter defenses that hacker can target.
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