Fergie's Tech Blog

Hacker Cleans Out 401(K) Account

Bob Sullivan writes on The Red Tape Chronicles:

One moment Dave DeSmidt had $179,000 in his 401(k) retirement account, the next he had nothing. In an instant, 25 years of savings had disappeared.

With a few clicks, someone raided DeSmidt’s retirement account with J.P. Morgan & Co and ordered a full disbursement to a private checking account.

Then came the really bad news. While credit card and online banking accounts are legally protected in the event of fraud, DeSmidt’s brokerage account came with no such insurance. Two months after the theft, his balance still read $0.

With hacking of brokerage accounts increasing, the legal gap facing DeSmidt and other victims has regulators and critics debating the need for new consumer protections.

posted by Fergie @ 1/05/2007 12:43:00 PM