Schwab: Cyberattack On Website Abates

April 25, 2013

Attacks on Schwab website stop for now, but CEO warns investors more may yet come.

Charles Schwab, the discount broker whose online operations have been hacked in the past 48 hours, hasn’t yet seen today any continuation of the cyberattacks that had disrupted trading operations for some of its clients on Tuesday and Wednesday of this week.

The company suffered “denial of service” attacks by an unnamed party on Tuesday and Wednesday, leading to blocked access for two hours on April 23 and intermittent blockage of access on April 24, according to a letter from Schwab Chief Executive Officer Walt Bettinger that the company posted on its website. Bettinger stressed in the letter that no client accounts or data were accessed in the attacks.

“We haven’t seen any attack today that we know of,” Sarah Bulgatz, a Schwab spokeswoman, told IndexUniverse, reaffirming what Bettinger had stressed; namely. that no client account or information had been accessed in the incidents this week.

The Schwab attacks, combined with an outage earlier today at the CBOE futures exchange in Chicago, have created a subtle sense among investors that all the electronic infrastructure in modern financial markets may at times be leaving them quite vulnerable. The CBOE outage, which lasted several hours, was caused by “system problems.” The exchange opened for trade at 1:00 p.m. Eastern time.

Bettinger, in his letter, encouraged clients to call 800.435.4000 or visit any Schwab branch if they can’t access websites or if they think trades they made were affected by the “denial of service” attacks.

More broadly, Bettinger implored Schwab clients to brace for more of the same, as such attacks have been on the upswing in recent years—though brokerages appear to be a new fold to the plot in the wake of a number of attacks against banks previously.

“Based on the history of denial-of-service attacks on other companies, we anticipate these attacks may continue against our industry—and us—for some time,” Bettinger wrote. “We will continue to work with the industry and law enforcement to ensure our websites are available without interruption.”

Schwab has almost 9 million active brokerage accounts, and had more than $2 trillion in total client assets at the end of the first quarter.

 

 

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