Financial Securities Firm Left Customers Vulnerable

Insecure Financial Securities

Last week, the Financial Industry Regulatory Authority (FINRA) handed out a $650,000 fine to a broker-dealer in the Lincoln Financial Network. The industry watchdog group found that the independent broker-dealer in Lincoln Financial’s network allowed thousands of customers’ data to be exposed to foreign hackers. Similarly FINRA also found that Lincoln Financial Securities Corp. failed to ensure the security of their customers’ consolidated reports. Consolidated reports store essential client account information and assets. FINRA’s charge states that sensitive customer information was left vulnerable to cyber threats from 2011-2015. The failure of Lincoln Financial to secure their customers’ data led to foreign hackers exposing more than 5,400 customers’ confidential information from one of the firm’s cloud servers. Lincoln Financial Securities has neither admitted or denied guilt to the allegations. The financial securities firm has reached a settlement with FINRA for $450,000.

Who’s to Blame?

What should be troubling for consumers is Lincoln Financial’s failure to accept ethical responsibility for their lack of action in properly securing vital customer information. They have reached a financial settlement, but refuse to acknowledge fault on behalf of the firm in either instance. The Lincoln Financial Network has nearly 9000 independent broker-dealer representatives. Apparently, oversight over these independent reps is severely lacking and, with this many, there could be a whole lot more customer account databases left vulnerable to security threats. National financial securities firms need to know that simply paying a fine is not sufficient. Thousands of customers’ financial security is left in the hands of these firms and they have a responsibility to protect their customers’ information. Bringing out the checkbook is not the same as waving a magic wand. A customer’s sense of security is violated when something like this happens. Large financial securities firms need to take measures to ensure their customers’ peace-of-mind about the continued protection and retention of personal information.