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Written by Chuck Bowen
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Sunday, 01 July 2007 13:28 |
Just when you thought it was totally safe to manage your investment portfolio online, something like this happens to give us all a wake-up call. One moment Dave DeSmidt had $179,000 in his 401(k) retirement account, the next he had nothing. In an instant, 25 years of savings had disappeared.
With a few clicks, someone raided DeSmidt’s retirement account with J.P. Morgan & Co and ordered a full disbursement to a private checking account. Then came the really bad news. While credit card and online banking accounts are legally protected in the event of fraud, DeSmidt’s brokerage account (and likely yours as well) came with no such insurance. Two months after the theft, his balance still read $0
Let's face it: Brokerage account tampering is increasing, with regulators and critics currently debating the need for new consumer protections.
Chuck's Recommendation: For now, shut down web trading access to your account. Until better security controls / protections are in place, make all trades via the phone through your broker/advisor.
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