Articles Posted in Hacking

Chicago-based Stoltmann Law Offices is representing investors who’ve been victims of cryptocurrency thefts. These days, cryptocurrencies or “digital cash” are all the rage. You can speculate with it, buy a few consumer goods, and even play games. Unfortunately, like any currency that is a store of value, it can be stolen.

One of the largest heists in the short history of cryptocurrencies occurred recently when customers of Axie Infinity, a play-to-earn online game, lost some $625 million to a thieving hacker.

It was reported that the Axie account was hacked on March 23rd, although it was only revealed on Tuesday, March 29th.  According to Yahoo News, “Axie Infinity remains one of the most popular play-to-earn games, and users continued to log on Wednesday after news of the crypto heist. Hackers targeted a vulnerability in the bridge — or a software mechanism for exchanging types of crypto tokens — to drain funds in two separate transactions.”

Stoltmann Law Offices, P.C. is evaluating cases for Robinhood clients whose personal identifying information or other confidential information that was exposed to a hacker according to a November 8 notice sent out by the company. The notice sent to clients stated that, on November 3, 2021:

“The unauthorized party socially engineered a customer support employee by phone and obtained access to certain customer support systems. At this time, we understand that the unauthorized party obtained a list of email addresses for approximately five million people, and full names for a different group of approximately two million people. We also believe that for a more limited number of people – approximately 310 in total – additional personal information, including name, date of birth, and zip code, was exposed, with a subset of approximately 10 customers having more extensive account details revealed. We are in the process of making appropriate disclosures to affected people.”

Robinhood clients impacted by this data breach could have viable claims for recovery if the victim can establish actual damages. If your credit has been compromised, if you have paid for credit monitoring, if you are the victim of a subsequent data breach that cost you money, you could have a viable claim for recovery. Stoltmann Law Offices is exploring all options to help victims of this data breach.

Chicago-based Stoltmann Law Offices has represented investors who have suffered losses as a result of their brokerage or investment accounts being infiltrated by hackers.  How safe are your retirement funds from hackers? With massive hacking activity and cybersecurity in the news every day, that’s an essential question to ask your financial advisor. Cybercriminals are trying to steal money and personal financial information 24-7.

Here’s a series of questions to ask: When financial advisors suspect that your retirement accounts are being hacked, have they reported this information to you? Even more importantly, have they reported it to federal authorities such as the FBI or Treasury Department? That’s not only the right thing to do, they are legally obligated to do so.

Of course, if an advisor or third party fails to report suspicious online activity to regulators, they may be breaking the law. The U.S. Securities and Exchange Commission (SEC), for example, recently imposed a $1.5 million fine and settled charges against GWFS Equities, an affiliate of Great West Life and Annuity Insurance Company, “for violating the federal securities laws governing the filing of Suspicious Activity Reports (SARs).”

Stoltmann Law Offices has previously alerted consumers that their brokerage firms can be held responsible for theft in their brokerage, bank, or cryptocurrency accounts as a result of hacking. We have been successful in recovering these losses from brokerage firms for our clients. That is because the regulations are very clear on the supervision and compliance procedures that these firms must execute to protect their clients and their hard-earned savings.

FINRA Rule 3110 requires brokerage firms to establish and maintain a supervisory system to achieve compliance with applicable securities laws and regulations. Included in this supervisory system is the requirement to safeguard customer funds and securities and to inspect the “transmittals of funds (e.g., wires or checks, etc.) or securities from customers to third party accounts; from customer accounts to outside entities (e.g. banks, investment companies, etc.)…” (FINRA Rule 3110(c)(2)(A)).

Firms are further required to comply with the Gramm-Leach-Bliley Act Safeguards Rule (Regulation S-P) and the Identity Theft Red Flags Rule (Regulation S-ID). Pursuant to Regulation S-ID, this includes having an Identity Theft Prevention Program with procedures to identify, detect, and respond to red flags of identity theft. 17 CFR §248.201(d).

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