Pepperstone Updates Clients on Data Breach Investigation

Multi-regulated FX broker Pepperstone has just updated its clients about the data security breach that occurred just over a week ago. The company said the security issue had originated from one of its third-party vendors after cybercriminals used malware to compromise its computers and obtained access to the provider’s credentials.

Not so long after that, the team further explains, the intruders then used those credentials to gain partial access to Pepperstone’s internal client relationship management system (CRM). Although it managed to stop the cyber attack, the miscreant gained possession of some personal information of a subset of Pepperstone’s clients.

The company has provided more details of its ongoing investigation into the matter, revealing the types of personal data that may be affected. The global broker confirmed the breach included clients’ names, contact details (such as email, phone number and physical address) and date of birth.

However, the broker said none of its trading systems, client’ accounts, identity documents, passwords or bank accounts were compromised or at risk, as a result of the incident.

According to an email sent to clients, the results came from Pepperstone’s ongoing forensic investigation into the incident.

“The criminals accessed a subset of our account holder data via the client relationship management system. Importantly, the criminals weren’t able to access our trading environment or our financial systems, which are segregated from our client relationship management system. This means that the criminals didn’t gain access to any trading accounts, banking details, passwords or ID documents that we hold for you. Our clients can continue to have confidence in using our trading systems safely and securely.”

Pepperstone Immediately Notified Affected Individuals

A spokesperson of Pepperstone Group Limited explained the following to Finance Magnates: "Pepperstone has conducted a forensic investigation into a malware attack on 22 July, which compromised a computer system used by an external service provider in order to steal their user credentials.

"Before the attack could be stopped, criminals were able to obtain some personal information of some of our account holders. We believe that the information was shared with third parties, who made unsolicited contact with Pepperstone account holders.

"It’s important to note that no trading accounts, passwords or bank account information have been compromised. Our investigation has confirmed that information is limited to client names, some contact details and some personal details.

"We immediately notified the individuals affected, and provided information and recommendations to help ensure their ongoing security. We are extremely concerned that this incident has occurred and will continue to do everything we can to ensure our clients can continue to trade safely and securely."

Pepperstone Recommends Steps to Ensure Account Safety

Once Pepperstone became aware of the issue, on July 22, the company engaged as a matter of urgency with their respective data privacy regulators and independent external forensic experts to conduct an extensive investigation

As a precaution, however, Pepperstone told clients to enable two-factor authentication and change their passwords. And more importantly, they were asked to contact their local cybercrime agency if they believe their personal information has been compromised. Clients were also advised to consult with their banks immediately if they sent money or provided confidential banking information to any potential scammers in general.

Speaking to Finance Magnates Tamas Szabo, Chief Executive Officer, Pepperstone Group said: “The cybercrime industry is increasingly more sophisticated, more flexible and more global – a threat to all companies, governments and individuals around the world.

“Over several years we have invested heavily in cyber resilience, building a substantial IT security environment. Our industry-best practice is the reason we were able to detect and stop this attack so quickly.”