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News

Ameritrade hack could expose more than 6 million customers

CyberArk Software : 17 September, 2007  (Technical Article)
Cyber-Ark comments on what it believes could be the largest hack ever in terms of customer exposure.
Calum Macleod, European director with Cyber-Ark, the data vaulting and encrypted company information specialist, said he was incredulous when he heard that online brokerage Ameritrade's 6.3 million - plus customer database, had been hacked.

The US stock brokerage admitted late Friday that its customer database had been hacked and contact information stolen on more than 6.3 million customers.

The firm is reported to be co-operating with the FBI, the US Securities and Exchange Commission and several other key agencies.

'This could turn out to be the largest systems hack in terms of customer numbers yet seen in the online marketplace,' said Macleod, adding that some unconfirmed reports suggest it is only the contact information that has been stolen, and not personal data such as Social Security numbers.

'This suggests to me that the theft is related to business espionage rather than out-and-out fraud, as such,' he said.

Newswire reports suggest that Ameritrade has known about the problem since May of this year, when two customers sued the firm, claiming they were receiving unwanted ads on email accounts used solely for stock trading with the online brokerage.

'If the plaintiff claims that the Ameritrade database has been vulnerable to hacker attacks since last October are substantiated, then they will have a lot of explaining to do,' said Macleod.

'Whatever the outcome of the lawsuit(s), this is a classic case of what can happen when a company fails to encrypt its customer database. The damage to a company's reputation can often be worse than the payouts that result from successful lawsuits,' he added.
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