FINRA advises brokers to bulk up security

The Financial Industry Regulatory Authority (FINRA), the largest regulator of investment firms, is warning its members to strengthen their policies around verifying fund transfer and withdrawal requests from customers.

In a regulatory notice released Thursday, FINRA said it has received an influx of reports of customer computers becoming infected with malware, which can give attackers control over victims' email and brokerage accounts.

"Typically, the perpetrators of these fraudulent schemes email brokerage firms from customers' personal email accounts with instructions to wire funds to an account, often overseas, controlled by the perpetrator," the notice said. "The instructions may be accompanied or followed by fraudulent letters of authorization also
emailed from compromised email accounts."

To defend against this threat, financial companies must ensure they have implemented a surefire way to confirm the customer's request is real.

The notice recommended that securities firms institute a means to verify the email was actually sent by the customer and to also have in place the ability to detect anomalous requests.

FINRA also issued an alert for investors to be on the lookout for scams that can lead to their machines becoming infected and their email accounts compromised.