London Hedge Fund Foretelus Capital Fonejacked for $1.1 Million

A court filing details a case of stolen funds from a hedge fund in London by a cleverly disguised phone jacker. On a late Friday afternoon in 2013, when the Chief Financial Officer (CFO) of London-based hedge fund Fortelus Capital Management picked up the phone to answer a call he had no suspicions of the malicious intent of the caller on the other end of the line.

The individual claimed to be representing the company’s bank Coutts. Without questioning the identity of the caller, the CFO responded to the request to generate some codes to the individual on the other end of the phone line, allegedly to cancel 15 Payments Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl Read this Term which were deemed suspicious by the “bank”.

The firm's books parted with £742,668

The phone jacker claimed that there was suspicious activity with the account, which was sufficient for the CFO Thomas Meston to share the confidential data with the caller on the other end of the line.

Logging into the company’s bank account on the Monday revealed a disaster in the making from Friday afternoon. The firm's books parted with £742,668 ($1.14 million) which went missing from the Coutts bank account.

There were no recordings of any bank employee calling the office of Fortelus Capital Management on that Friday.

The CFO was immediately terminated by the hedge fund, and they are currently in the process of taking legal action against Mr. Meston. According to the court documentation, which is publicly available, the defendant is pleading not guilty and argues that there was no negligence conducted on his part.

The former CFO of the hedge fund has given up his bonus checks and salary totaling £136,600

Fortelus' lawyers stressed that client funds have remained unscathed by the major security breach. The firm has aimed to reassure its investors that the occurrence was due to human error and that steps have been taken by Fortelus to ensure the safety of the firm’s capital.

Mr. Meston's innocence is yet to be proven in court, but according to his defense he acted in good faith and did not realize that he was giving out sensitive information over the phone.

The case made by Meston's lawyer is that the CFO is not personally liable to cover the funds stolen from Foretells Capital Management with his own assets.

According to the court documents, as a consequence of his actions, the former CFO of the hedge fund has given up his bonus checks and salary totaling £136,600 ($210,000).