How a hacker led to Finra censuring and fining a broker-dealer

How a hacker led to Finra censuring and fining a broker-dealer
Buttonwood Partners of Madison, Wis., fined $50,000 over unauthorized transfers.
AUG 20, 2018

The Financial Industry Regulatory Authority Inc. has censured Buttonwood Partners and fined the small, Madison, Wis.-based broker-dealer $50,000 for having inadequate procedures in place to prevent unauthorized transfers from customers' accounts. Finra said that Buttonwood used pre-signed letter of authorization forms to permit payments to third parties from clients' accounts. In one case, it wired $207,300 from a customer's account as directed by fraudulent emails to accounts controlled by a hacker. (More: Financial professionals targeted by sophisticated 'keylogger' malware)​ On March 11, 2015, Buttonwood became suspicious of a wire request it received and called the customer to confirm. Upon reaching the customer by telephone, the fraud was discovered. Buttonwood and its clearing firm were able to retrieve all but $61,932.35 of the previously wired funds, Finra said, and in April 2015, Buttonwood reimbursed this remaining amount to the customer, and reported the violations to Finra. (More: Finra: Firms begin to heed cybersecurity, but have much to do)​

Latest News

Advisor moves: Atlas tops $1B as Wells Fargo, UBS add bank veterans
Advisor moves: Atlas tops $1B as Wells Fargo, UBS add bank veterans

Wells Fargo adds two bank-channel recruits, UBS lands a JPMorgan Chase veteran, and a multi-family office lifts Atlas past $1B

Advisor mom’s son used her password to log into clients’ accounts, sell deal with conflicts, according to Washington state
Advisor mom’s son used her password to log into clients’ accounts, sell deal with conflicts, according to Washington state

“The state comes down on you in years when you make 40% returns for clients,” said Bill Swayne, the advisor and son of Candace Swayne.

Osaic in talks with Anthropic as AI reshapes advisor workforce
Osaic in talks with Anthropic as AI reshapes advisor workforce

The Independent broker-dealer giant has had “active conversations” with the Claude maker, which is days away from its expected IPO

The retirement milestone advisors aren't tracking
The retirement milestone advisors aren't tracking

For Gen X clients entering life after work, answering the financial question isn't enough to solve the entire retirement equation.

Wealthtech firms target stock pay, pensions and heirs for advisors
Wealthtech firms target stock pay, pensions and heirs for advisors

Tools from Grantd, Income Lab and Healthspan Wealth aim to keep RIAs involved in clients’ biggest money decisions

SPONSORED Best Practices for Engaging Women Around Alternatives

Growing wealth, evolving priorities, and untapped opportunities are reshaping how women approach long-term investing.

SPONSORED Built on insurance experience to deliver on long-term promises

Knighthead Life entered the market with a competitive MYGA. A strong launch earned advisor confidence and paved the way for FIAs.