Lincoln Financial Unit Hit with $650K Fine Over Data Hack

“The Financial Industry Regulatory Authority censured Lincoln Financial Securities Corp., a Lincoln Financial Network broker-dealer, and fined it $650,000 for failing to reasonably safeguard confidential customer data, according to a letter of settlement posted on the regulator’s website on Tuesday.

The penalty highlights the increasing importance Finra is putting on cybersecurity and data privacy issues at firms ranging from wirehouses to robo-advisors and the need for vigilance in overseeing the integrity of core operating systems. Earlier this week, Cetera Financial Group’s 9,000 independent brokers lost access to key systems for almost two days due to a still-unexplained systems outage.

The Lincoln Financial fine originated with the parent company’s 2011 decision to use a cloud-based computer server for data storage, according to the Finra enforcement letter.

Users with foreign internet protocol addresses hacked the server and accessed confidential records of approximately 5,400 customers, Finra said. The data included account applications and customers’ social security numbers, according to the letter of acceptance signed by Lincoln Financial.”

Read more details here.

Author: David Peterson