JPMorgan, UBS among Trio Accused of Shoddy ID Theft Protection

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https://www.theregister.com/2022/07/28/jpmorgan_sec_fine/

JPMorgan Securities, UBS Financial Services, and TradeStation Securities aren't doing enough to thwart crooks who want to steal customers' identity, says America's financial watchdog.

The SEC on Wednesday announced it charged the investment management firms with deficiencies in their identity theft prevention systems. These systems are supposed to stop fraudsters from, say, opening accounts in their victims' names. All three have been fined with no admission of liability: JPMorgan will pay $1.2 million, UBS will cough up $925,000, and TradeStation's penalty totals $425,000.

To put these figures in perspective, JPMorgan Chase posted $48.3 billion in profit [PDF] last year, UBS' annual profit hit $7.5 billion in 2021, and TradeStation recorded a $31.7 million net loss (from $210 million revenue) for its most recent fiscal year. In other words: a mild annoyance rather than a deterrent.

In addition to the money, the three firms promised to stay on the right side of the law. Crucially, the trio did not "admit or deny" the SEC's allegations they broke Rule 201 of Regulation S-ID, which requires the trading outfits to have in place measures “designed to detect, prevent, and mitigate identity theft in connection with the opening of a covered account or any existing covered account." The SEC said its investigators found that, between January 2017 and October 2019, the three firms' identity theft prevention programs did not include "reasonable policies and procedures" to, among other things, detect red flags indicating likely identity theft, and then prevent and mitigate this risk.

JPMorgan, UBS accused of shoddy identity theft protection

SEC extracts pocket change from bankers, wags finger, sends them on their way

www.theregister.com