CEO scam attack results in large financial loss

Synopsis

In August 2015, the US networking firm disclosed that cyber attackers stole USD $46.7 million using a business email compromise attack in which attackers pretend to be executives at the victim company to initiate unauthorised international wire transfers to bank accounts controlled by the attackers.

The company were originally alerted to the potential fraud by the Federal Bureau of Investigation who had been monitoring suspicious, large transactions out of the company's subsidiary's bank accounts in Hong Kong.

The incident ultimately resulted in the loss of USD $39.1 million (initially USD $46.7 million was misappropriated which represented 10% of the company's cash position at that time) as some of the misappropriated funds were recovered.

The event was exacerbated by organisational changes at senior management level and an inadequate control environment across their accounting team's operations.

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Analyst

Courtenay Brammar

Experienced global enterprise risk and governance professional. Previously Vice President at Morgan Stanley, Deloitte Risk Advisory practitioner and PRMIA steering committee member in both London and New York.

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Companies

  • Ubiquiti Networks Inc.

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