Virtu financial trader said it had lost $6.9 Million to hackers. These hackers seized control of the email account of one of the executive and then used fake emails to send fraud wire transfers to the bank accounts in China.
High-Speed Trader Virtu Discloses $6.9 Million Loss
Virtu is one of the worlds largest high-speed trading company. On Monday, a lawsuit filed against Axis Insurance Co. to cover the loss. However, the loss from the hack is small for Virtu. The Virtu company is one of the world’s most technologically sophisticated electronic trading company. It shows how the tech firms can become a victim to “social engineering” attacks where hackers show trusted people to trick the employees.
A person said the breach was limited and did not give client information or any other information regarding the firm’s trading system.
In Mid-May, the unknown hacker got access to the Virtu official email. Then it sent fake messages after 13 days, said the company in a lawsuit. The lawsuit was filed in a New York federal court. Along with the lawsuit, an affidavit was also filed which identified the executive as Jeffrey Lumby who is head of the capital market at Virtu’s US brokerage arm. Jeffrey Lumby did not comment on anything. The affidavit was available publicly, but later it was removed from public court records.
As the fake messages were sent from the Virtu’s account, the back capital called the accounting department believing the messages are real. The two wire transfers total of $10.8 million to China was done. At the time of the routine check, Virtu saw the fraud and took action against it by filing police reports.
Virtu got orders of freezing some of the funds which are held at Bank of China, but remaining money which is about $6.9 million won’t be recovered.
Virtu claimed Axis for breach of contract after the insurer refused to cover the loss. Virtu took an insurance policy from Axis last year which covers computer systems fraud. However, the bank refused to cover the claim by saying the loss was directly not caused by the hack. Axis spokesman did not comment on this matter.
Since the starting of the year, the Virtu Firm’s share price is up more than 40%. However, Virtu recently reported that the total revenue in the first six months is doubled from the year earlier.