Hedge Fund Managers: Have You Considered Cybersecurity?
Hackers have penetrated a number of hedge funds in the past two years, says The New York Times. Cybersecurity for hedge funds should be a priority.
7 November 2014
Clearly, hedge fund managers need to devote more attention to cybersecurity. In recent years, hedge funds have spent, individually, many thousands of dollars to take their operations online and to automate them.
However, these businesses haven’t sufficiently invested in cybersecurity — or in the proper training of staff in security best practices. That makes hedge funds attractive targets to cyber criminals. In fact, said a recent article in The New York Times, in the past two years, hackers have penetrated a number of hedge funds.
The extent, severity, and impact of these breaches are still unclear. But, regrettably, this isn’t surprising: “Hedge funds are woefully undersecured,” an expert told the Times. “The lack of investment in their cybersecurity has placed them in the line of fire.”
Low Hanging Fruit for Hackers
But, regrettably, it’s not surprising: Hedge funds are ideal targets for hackers since they represent billions of dollars. As the Time notes, for years, to steal from them, criminals have used conventional hacking methods, such as breaking into a broker’s account to steal clients’ information and trading illicitly. Criminals have also used denial of service attacks.
But lately, the attacks have grown more sophisticated — recently, hackers used Cryptolocker assaults against multiple hedge funds. This method employs ransomware to infect and encrypt user files — the perpetrator then demands a ransom to unlock the files.
For retailers, as well as for Wall Street and beyond, hacking is a runaway problem. As the Washington Post reported, the federal government notified 3,000 businesses these businesses had been hacked in 2013. Each week, there seems to be another announcement of a major penetration. To cite one of the bigger ones, we need only name Home Depot, which had tens of millions of customer payment card records compromised.
Network hacks are occurring constantly, and if anything, we underestimate the problem of cyber-theft.
Enter the Cloud
It’s also worth noting that hedge funds, like other businesses, are sharing data with clients and other third parties. Obviously, with the proliferation of shared information, and its wider distribution, the risk of data exposure increases.
The takeaway: Today, it’s reasonable to assume that after your information and content leaves your hands, they will live, in effect, forever. And there are sophisticated hackers ready to pounce, with the latest in penetration technology and methods.
It’s paramount to secure your information. Ready to protect yourself? To begin, you should consider where you might be facing exposure. We’ll have more on that in our next blog.
Marc Songini has worked in the information technology field for more than 16 years. His roles have included those of journalist, analyst, and marketing communications specialist. He admits that when he started out as a cub high tech reporter, Netscape was still rocking the industry with a wondrous new user interface called a “browser.” During his 10 years with International Data Group (IDG), Marc wrote for NetworkWorld and Computerworld, both award-winning magazines. Marc specializes in cloud, enterprise apps, and figuring out the meaning of being human in an automated world.