Risk is everywhere. It's all around us every day. I'm not simply referring to market risk, but also risks to our identity and finances due to the convenience tradeoffs associated with just about everything being web-enabled these days.
But with all the cyber-related risks out there, it's interesting and scary to remind ourselves that most financial fraud is still person-to-person, not simply the result of crooks hacking into a large company's database. It's the person on the phone, on your doorstep, or even in a fancy office somewhere.
During my career I've fielded calls from fraudsters impersonating clients, seen forged wire requests come through, and have even dealt with extended family members trying to gain access to client accounts for a variety of nefarious reasons. Low-tech methods still seem to be the tool of choice.
Financial fraud is often directed at seniors who, according to the FBI, typically have assets, good to great credit, and were raised to be polite. These criteria were likely present during a recent string of fraudulent telephone calls made to investors by crooks purporting to be from the Securities and Exchange Commission (SEC).
Apparently, somehow swindlers got hold of some basic information about people's investment accounts, maybe such as which firms they do business with, and then called the investors on the phone pretending to help them complete a transaction. A few weeks ago, the SEC released an alert about this activity and, interestingly, attached audio files of one of the calls. Continue reading below for more information.