Alerts and Identified Risks
(New) Phishing Email Purporting to be from FINRA
FINRA warns member firms of a widespread, ongoing phishing campaign that involves fraudulent emails purporting to be from FINRA asking member firms to complete a survey. The email was sent from the domain “@regulation-finra.org” and was preceded by “info” followed by a number, e.g., firstname.lastname@example.org. FINRA recommends that anyone who clicked on any link or image in the email immediately notify the appropriate individuals in their firm of the incident. The domain of “regulation-finra.org” is not connected to FINRA and firms should delete all emails originating from this domain name. FINRA has requested that the Internet domain registrar suspend services for “regulation-finra.org.”
• FINRA Regulatory Notice 20-35 (October 6, 2020): Phishing Email Purporting to Be From FINRA
(New) OCIE Risk Alert
This Risk Alert highlights “credential stuffing,” a method of cyber-attack to client accounts that uses compromised client login credentials, resulting in the possible loss of customer assets and unauthorized disclosure of sensitive personal information. The Office of Compliance Inspections and Examinations (“OCIE”) has observed in recent examinations an increase in the number of cyber-attacks against SEC-registered investment advisers and brokers-dealers using credential stuffing.
• SEC Office of Compliance Inspections and Examinations Risk Alert (September 15, 2020): Cybersecurity: Safeguarding Client Accounts Against Credential Compromise
Imposter Registered Representative Websites
Several firms have recently informed FINRA that malicious actors are using registered representatives’ names and other information to establish websites (“imposter websites”) that appear to be the representatives’ personal sites and are also calling and directing potential customers to use these imposter websites. Imposters may be using these sites to collect personal information from the potential customers with the likely end goal of committing financial fraud.1 This Notice describes certain common characteristics of these sites and actions firms and registered representatives can take to monitor for and address these sites.
• FINRA Regulatory Notice 20-30 (August 20, 2020): Imposter Registered Representative Websites: Fraudsters Using Registered Representatives Names to Establish Imposter Websites.
Imposter Websites Impacting Member Firms
Several member firms have recently notified FINRA that they have been victims of imposter websites—which are sites designed to mimic a firm’s actual website with the end goal of committing financial fraud. This Notice outlines steps firms can take to monitor for imposter websites and what to do if an imposter website is found.
• FINRA Information Notice (April 29, 2019): FINRA Provides Guidance to Firms Regarding Suspicious Activity Monitoring and Reporting Obligations
FINRA Warns of Fraudulent Phishing Emails Purporting to be from FINRA
FINRA warns member firms of a widespread, ongoing phishing campaign that involves fraudulent emails purporting to be from FINRA officers, including Bill Wollman and Josh Drobnyk. These emails have a source domain name “@broker-finra.org” and request immediate attention to an attachment relating to your firm. In at least in some cases, the emails do not actually include the attachment, in which case they may be attempting to gain the recipient’s trust so that a follow-up email can be sent with an infected attachment or link, or a request for confidential firm information. In other cases, what appears to be an attached PDF file may direct the user to a website which prompts the user to enter their Microsoft Office or SharePoint password. FINRA recommends that anyone who entered their password change it immediately and notify the appropriate individuals in their firm of the incident.
The domain of “broker-finra.org” is not connected to FINRA and firms should delete all emails originating from this domain name. In addition, the internet domain registrar has suspended services for “broker-finra.org.”
• FINRA Regulatory Notice 20-12 (May 4, 2020): FINRA Warns of Fraudulent Phishing Emails Purporting To Be From FINRA
FINRA Warns of Fraudulent Phishing Emails Targeting Member Firms
FINRA warns member firms to be on the lookout for a fraudulent phishing email that is currently circulating. Brokerage firms reported to FINRA that they have received suspicious emails targeting their compliance personnel. The email appears to be from a legitimate credit union attempting to notify the firm about potential money laundering involving a purported client of the firm. The email directs the recipient to open an attached document—which likely contains a malicious virus or malware designed to obtain unauthorized access to the recipient’s computer network. As a reminder, phishing scams are ever-changing and are designed to infiltrate the computer network of the recipient. Use caution when opening emails from unknown senders and do not open attachments until you verify the sender and information that might be included in the document.
• FINRA Information Notice (February 13, 2019): FINRA Warns of Fraudulent Phishing Emails Targeting Member Firms
FINRA Warns Firms of Regulator Impersonators
FINRA has received reports of member firms receiving telephone calls from persons claiming to work for FINRA in an attempt to deceive firms into revealing confidential information. FINRA is notifying firms that these individuals may be impersonators. Firms that receive telephone calls or emails purportedly from someone at FINRA requesting any type of information—confidential or otherwise—should use caution and verify the identity of the caller or sender before providing any information or responding to an email.
• FINRA Information Notice (July 13, 2018): FINRA Warns Firms of Regulator Impersonators
Cybersecurity Alert: Cloud Based Email
Several member firms recently notified FINRA that they have experienced email account takeovers (ATOs) while using cloud-based email platforms, including Microsoft Office 365 (O365). Attackers used compromised email accounts to defraud member firms by requesting fraudulent wire requests or stealing confidential firm information or non-public personally identifiable information (PII).
This Notice outlines the attackers’ tactics in executing ATOs, as well as steps taken by member firms to address ATO risks when using cloud-based email systems.
• FINRA Information Notice (October 2, 2019): Cybersecurity Alert: Cloud Based Email Account Takeovers
FINRA Reminds Firms to Beware of Fraud During the Coronavirus (COVID-19) Pandemic
The COVID-19 pandemic is affecting most aspects of our society and daily lives, as well as the U.S. economy and markets. Events with such profound impact routinely create opportunities for financial fraud. Firms and their associated persons should be aware of and take appropriate measures to address the increased risks and challenges presented during the COVID-19 pandemic. In addition to new scams focusing on COVID-19, previous scams may also find new life as fraudsters adapt to and exploit recent events and related vulnerabilities, especially those related to the remote working environment.
FINRA is committed to providing guidance, updates and other information to help stakeholders stay informed about the latest developments relating to COVID-19, which can be found on FINRA’s COVID-19/Coronavirus Topic Page.
FINRA will also continue to inform the industry on emerging cybersecurity trends and related frauds, and reminds firms to review resources on FINRA’s Cybersecurity Topic Page, which provides information on how firms can strengthen their cybersecurity programs.
• FINRA Regulatory Notice 20-13 (May 5, 2020): FINRA Reminds Firms To Beware Of Fraud During The Coronavirus (COVID-19) Pandemic
• FINRA Information Notice (March 26, 2020): Cybersecurity Alert: Measures to Consider as Firms Respond to the Coronavirus Pandemic
SEC Investor Bulletin
The SEC’s Office of Investor Education and Advocacy issued this Investor Bulletin to help investors protect their online investment accounts from fraud. As with all web-based accounts, investors should take precautions to help ensure that their online investment accounts remain secure. These online security tips can help.
• SEC Investor Bulletin: Protecting Your Online Accounts from Fraud (April 26, 2017)
FINRA Cybersecurity Topic Page
Given the evolving nature, increasing frequency, and sophistication of cybersecurity attacks – as well as the potential for harm to investors, firms, and the markets – cybersecurity practices are a key focus for FINRA. Visit the link below for more information on related rules, notices, guidance, news and investor education
FINRA Report on Cybersecurity Practices
This report continues FINRA’s efforts to share information that can help broker-dealer firms further develop their cybersecurity programs. Firms routinely identify cybersecurity as one of their primary operational risks. Similarly, FINRA continues to see problematic cybersecurity practices in its examination and risk monitoring program. This report presents FINRA’s observations regarding effective practices that firms have implemented to address selected cybersecurity risks while recognizing that there is no one-size-fits-all approach to cybersecurity.
A Small Entity Compliance Guide: Final Model Privacy Form Under the Gramm-Leach-Bliley Act
The model privacy form is designed to make it easier for consumers to understand how financial institutions collect and share their personal financial information and to compare different institutions' information practices. For a guide to implementing these procedures visit: https://www.sec.gov.