Data theft once again puts LPL clients at risk

LPL Financial yet again has fallen prey to a technology blunder that has placed private client information at risk. According to a letter sent last month to the attorney general of New Hampshire, an “unencrypted portable hard drive” was stolen from an LPL rep's car. According to watchdog databreaches.net, which first posted information about the breach, a web search indicated that Mr. D'Urso is a chartered retirement planning counselor with Stoneridge Wealth Management in Beaverton, Oregon. He has one client in New Hampshire, according to the letter. It's not clear how many LPL clients were affected by the theft. But Joseph Kuo, an LPL spokesman, said this was an isolated incident “that potentially impacts a very small number of clients.” An unencrypted portable drive can refer to a portable hard drive or storage device that is not protected by a code or key. Mr. Kuo noted that “all advisers' laptops and portable drives must be encrypted when storing client information. As soon as we became aware of this matter, we moved immediately and swiftly to address it, both with the adviser and the clients potentially involved.” As a result of the theft, however, private client information, including name, address, date of birth and social security number “may have been breached,” wrote Marc Loewenthal, LPL's senior vice president and chief security and privacy officer. LPL hired Mr. Loewenthal in March 2008 to focus on information and privacy issues. A year earlier, the firm reported that computer hackers had compromised the login passwords of 14 financial advisers and four assistants. Mr. Kuo said that that the theft in New Hampshire had no relation to the phishing incident that affected the 14 advisers two years ago. “Phishing versus one stolen portable drive are two very different issues,” he said. The theft of the portable drive apparently occurred Feb. 24. “We have no evidence that the information has been misused,” Mr. Loewenthal wrote to clients in a separate letter that was included as an exhibit to the New Hampshire attorney general's office. Nevertheless, LPL has advised clients “to remain vigilant by reviewing account statements.” The firm is also offering free identity theft protection and credit checks to ensure clients are protected, Mr, Kuo said. With 12,000 reps and advisers, LPL Financial is the nation's largest independent-contractor broker-dealer.