Slightly OT: [ Where the money went –
This is mostly about hacking, but fraud is fraud --Edited to shorten --.]
"By Ellen Nakashima Washington Post Staff Writer
Tuesday, October 24, 2006; Page A01
Hackers have been breaking into customer accounts at large online brokerages in the United States and making unauthorized trades worth millions of dollars as part of a fast-growing new form of online fraud under investigation by federal authorities.
E-Trade Financial Corp., the nation's fourth-largest online broker, said last week that "concerted rings" in Eastern Europe and Thailand caused their customers $18 million in losses in the third quarter alone. Another company, TD Ameritrade, the third-largest online broker, also has suffered losses from customer account fraud, but a spokeswoman declined to quantify the amount.------ Both E-Trade and TD Ameritrade have guaranteed that they will cover their clients' losses, even though they are not required to do so by law. -----More than 10 million people have bought or sold investments online in the United States in the last few months, according to a securities analyst for the Stamford, Conn.-based Gartner Inc.
a spokesman for Charles Schwab Corp., the largest online broker, said losses due to online identity theft and fraud have not reached "a material level" But he added that Schwab also guarantees to reimburse clients for online losses caused by fraud.
Unlike banks, brokerage accounts are not protected by Federal Deposit Insurance Corp. and other federal banking rules that ensure consumers get their money back, so the consumer must rely on the company to cover any losses.
"This thing is so widespread and it has such a significant impact on the industry at large . . . that I think you're going to end up seeing structural changes in the industry. "
[can’t come soon enough] !
