A $650,000 Lesson In Cybersecurity Shortcomings

By Glen Kopp and Laura Prebeck Hang, Bracewell LLP (December 5, 2016, 10:44 AM EST) -- Glen Kopp

Laura Prebeck Hang A Lincoln Financial Group subsidiary recently agreed to pay $650,000 to the Financial Industry Regulatory Authority to resolve allegations that it violated the Safeguards Rule, NASD Rule 3010 and FINRA Rules 3110 and 2010 by failing to implement sufficient security policies to protect confidential customer information after its web-based customer account database was hacked in 2012. The 2012 breach came on the heels of a $600,000 fine, imposed by FINRA in 2011, for lax security measures relating to its customer database. The settlement highlights the need for firms to scrutinize carefully both their own security policies...

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