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Pay us $10,000 in bitcoin or we’ll delete all your files

No, we wouldn’t dream of doing that. But there are lots of people who would.

One of them is Maksim Yakubets, the 34-year-old Russian national at the top of the criminal syndicate known as – and we couldn’t have made this up if we tried – Evil Corp.

“Yakubets and his co-conspirators are alleged to have victimized 21 specific municipalities, banks, companies, and non-profit organizations in California, Illinois, Iowa, Kentucky, Maine, Massachusetts, New Mexico, North Carolina, Ohio, Texas, and Washington,” according to the U.S. Justice Department. This “resulted overall in the attempted theft of an estimated $220 million USD, with actual losses of an estimated $70 million from victims’ bank accounts.”

Maksim Yakubets might very well have stolen your money at some point in his criminal career. So if you ever wanted to buy a car like that, good news: You already have. Credit: The Moscow Times

Nobody believes that these crimes – which landed Yakubets on the FBI’s 10 Most Wanted list – are the only ones he ever committed. Also, he’s hardly the only malware attacker out there – just one of the more flamboyant ones.

And, while Yakubets tends to go after organizations, others tend to go after individuals.

Don’t be one of them.

Protect yourself

Fortunately, there’s a whole community of professional paranoids committed to stopping cybercrime. Here are a few of their recommendations.

Assume your current password is awful. The first thing wrong is that “password” is singular. If you use the same password all over the Web, you’re begging for trouble. It should be long, complex and non-sequential. While that means “ABC” and “123” are bad strings, so are “QWERTY” – the first six characters of the familiar Sholes-Glidden keyboard design – and “2580” – the four numerals down the middle column of a 3x4 phone touchpad. The problem is at least as bad as you’ve already guessed; as recently as November 2020, the most popular password was “123456”.

Use two-factor authentication. It’s a bit of an inconvenience, but it’s worth it – particularly if your health or financial records are at stake. Two-factor authentication, or 2FA, involves you entering a password on the site’s landing page, then entering a PIN received via text message before you can access your account information. Depending on the site, you might be able to set up a fingerprint, or facial recognition 2FA layer instead of a PIN.

Secure your device. Nobody should be able to access your computer or phone without a passcode. Aside from that, it’s also important to keep up to date with the latest operating system patches. They are almost always pushed through in response to attempted or successful hacks.

Take a minute before you accept cookies. You’ve heard the term before but, if you don’t know what a cookie is in Web lingo, it’s a tiny block of data a site attaches to your device. It makes it possible to quickly retrieve your login information, shopping cart contents and payment preferences. If you don’t want or need these functions, don’t accept any cookies. If you do, accept only the ones that are fit for your purposes and decline those that might track your browsing history or those that the site extends for the benefit of a third party. It’s also a good idea to dump whatever cookies are already on your device. You can do that by clearing your cache. Without going into detail, you can get started by going into your phone’s Settings menu or, on your laptop or desktop computer, opening your browser and clicking Ctrl+Shift+Del.

Don’t overshare via email. Even if an email appears to be from a brand you trust, don’t respond with any personally identifiable information or anything related to your bank or credit card accounts. “Emails are like postcards. Anyone can see them,” a cybersecurity recently expert told us. One more point: If an unexpected email offers you a link to click, don’t. That would be an invitation to an intruder.

Public wi-fi is just that. While convenient, an internet onramp provided by your local diner could end up causing you more indigestion than the meatloaf. Because as easy as it is for you to get on the wi-fi there, it’s just as easy for hackers to do so as well. Better to connect to the internet via your mobile phone, according to ZDNet. While you could subscribe to a virtual private network – VPN in the biz – that is much better at masking your location geographically than protecting you from cyberattacks.

Stop using credit and debit cards. That doesn’t mean stop spending money – that’s another article – but they’re dangerous to flash around online. “The system of credit card use is outdated and not very secure at all,” according to PC Magazine. “Use Apple Pay or an Android equivalent everywhere you can. There are tons of choices when it comes to apps. … Setting up your smartphone as a payment device is typically a simple process. It usually starts with snapping a picture of the credit card that you'll use to back up your app-based payments. And setup pretty much ends there; you're ready.” The major advantage is that the security code is a static three- or four-digit number on your cards, but is a single-use string for payment apps. It’s like throwing out your Visa and getting a new one after every transaction.

Don’t be a victim. Sorry, there’s no other way to put it. If you believe the federal government will have you arrested if you don’t respond to this email, or that you have $1,000 credit with Amazon, or that a Nigerian prince needs your help transferring his money from one account to another and is willing to pay you for your assistance, then you’re being naive. By the way, this kind of scam – called phishing or social engineering – is older than the internet and is just as likely to reach you via the phone. “The IRS does not call you – ever,” our cybersecurity experts tells us. “They do all their correspondence by mail.”

Who’s watching your money?

Financial services firms have been provided a litany of regulations for how they are to go about protecting your money. That’s good news for you.

“For financial services companies in the US, laws addressing cybersecurity expectations and requirements include the Gramm-Leach-Bliley Act (GLBA), the Bank Secrecy Act, the
USA PATRIOT Act, the identity theft red flags rule, and Sarbanes-Oxley. Banks are regularly examined on their compliance with these rules, as well as published information security guidelines and bulletins,” according to British-based global law firm Latham and Watkins. “As a result, the financial services sector in the US is among the most aware, most organised, and most sophisticated industries facing the cyberthreat …”

And it would be great if L&W ended the sentence right there.

“… yet it is simultaneously amongst the most targeted.”

Broker-dealers and investment advisors are subject to the authority of the Securities and Exchange Commission, which concentrates its cybersecurity operations in the Office of Compliance Inspections and Examinations. It is OCIE’s duty to identify cyber-risks stemming from firms’ auditors and other third-party vendors. The operative law is Regulation SP, which requires firms to safeguard the confidentiality of customer records. It’s important to note that OCIE offers only guidance and that there is little in the way of concrete rules governing financial firms’ cybersecurity.

Still, there are best practices as identified by the Financial Industry Regulatory Authority, an industry self-regulating organization chartered by the SEC. FINRA’s guidance centers around:

Vulnerabilities specific to branches as opposed to headquarters,
Asset inventory exposure,
Phishing,
Insider threats,
Privileged user controls,
Data loss prevention and
Third-party risk.

There is also a list of practices related to the underlying technology. Of course, executive and management support is as critical to any cybersecurity initiative, just as it is for any other initiative. These systems are only as useful as the people sitting in the chairs, so training is a key consideration, as is penetration testing – having white-hat hackers try to infiltrate the system before the black-hats find the way in.

Even so …

What we hope we’ve provided you today are some concrete steps you can take to mitigate your chances of having your money or your identity stolen online. Mitigation is not the same as elimination. We would never pretend to offer you that.

There are other habits you could adopt to burrow even deeper into cybersecurity. Chrome is not the only browser, nor is Google the only search engine available. SMS isn’t the only way to exchange text messages. There are inherent risks in using all of those, and they have competitors whose key value proposition is that they insulate users from hacks that can come via those channels. You probably don’t need to go that far, but we wouldn’t blame you if you did. There are also things you could be doing in the social media realm to make sure that Facebook, Twitter and their peers don’t know more about you than you care to tell them – and that you take steps to make sure they don’t share your data with their advertisers and whoever else.

Still, what we offered you is more than just security theater. If you follow these protocols, the cybercrooks are much more likely to target the next guy.

And the same goes for your financial professionals. Sorry, but there’s no way to guarantee that even the most diligent firm won’t get hacked but, if the people there are doing everything they can to harden their systems against attack, odds are it will be some other firm’s vulnerabilities that get exploited.

What is your financial advisor doing to keep your accounts and data safe? If you don’t know, maybe you should ask.

Work, in progress

Having a little trouble getting some assistance in Home Depot’s plumbing aisle? Is your favorite restaurant closed at least one night a week now? Did you walk in for a haircut but walk out with an appointment for next Tuesday?

Welcome to the labor shortage of 2021. Some blame it on the Covid-19 pandemic. Some blame it on the extraordinarily generous government response to it. But here’s another thought: Something like this was bound to happen, and the events of the past year and a half just caused it to happen sooner rather than later.

USPFA doesn’t give us free iPhones. Hey, boss …! Credit: Business Insider

What’s changed

The most obvious change in the workplace since 2019 is the lack of it. According to a Pew Research study last December, roughly two-thirds of those working from home said it’s because their workplace was not available; the other one-third actually chose to work-from-home. On the surface that’s surprising, but a follow-up question revealed that the majority of all these remote workers was not looking forward to returning to the office.

Not that telecommuting is all that great either. Parents are having trouble getting work done without interruption while those who are still fairly new to the work force aren’t feeling motivated without the presence of their coworkers and bosses.

Also, so-called Zoom fatigue is a real thing. It’s the burnout that comes from too many videoconferences. Then again, we don’t know of any pre-2020 studies that looked at in-person meeting fatigue. So, who knows if the medium is the real problem?

Of course, not everyone has meetings for a living. We’re talking mostly about those with advanced degrees and higher incomes, who found out what they had always suspected: With 21^st-century technology, there was no earthly reason to go into the office except to steal pens, paper clips and printer ink. But what about blue-collar workers?

“About three-quarters or more of those employed in retail, trade, or transportation (84%); manufacturing, mining, construction, agriculture, forestry, fishing and hunting (78%); and hospitality, service, arts, entertainment and recreation (77%) say that, for the most part, the responsibilities of their job can’t be done from home,” according to Pew. “Two-thirds of those in the health care and social assistance sector say the same.”

Pew found that these employees are generally satisfied with the measures that have been put in place to protect them from being exposed to the coronavirus. That though might be the end of the list of what they’re happy about.

Roughly one out of four workers are less satisfied with their jobs than they were pre-pandemic. The vast majority of workers say their chances for advancement are no better, nor is their job security, nor is the perceived quality of management. Surprisingly, flexibility in scheduled hours – what had been touted as a silver lining of the pandemic’s impact on work – is little better.

So, it’s no wonder that many workers have just stopped showing up. In April 2021, 4 million Americans – more than in any previous month – quit their jobs. Welcome to The Great Resignation.

“Take this job …”

From March to April 2020, the unemployment rate skyrocketed from a healthy 4.4% to an astonishing 14.7%. That means almost 16 million people were thrown out of work.

The government had to do something, even if it wasn’t the optimal thing to do. Rather than follow the lead of many other leading economies – paying employers to keep everyone on the books until this whole thing blew over – the Republican White House, Democratic Congress and Republican Senate agreed to send each individual an economic impact payment, then pay anyone who was out of work hundreds of dollars a week of unemployment insurance, whether or not they ever paid into the trust. When the Democrats won the White House and both houses of Congress in January, they repeated this and threw in a tax credit for every minor child of every taxpayer, payable in chunks of $300 per month rather than as a refund on taxes at year-end.

It was bound to happen that, for workers in low-wage jobs, it made more economic sense to stay home and collect that money than to punch in at work. But this doesn’t mean they were idle.

Lots of people took the opportunity to make good on the dreams they had before they got stuck at a $12-an-hour job. They took classes and started better careers. Some opened their own businesses. In 2019, 3.5 million businesses started up in the U.S. The following year that figure surged 24% to 4.4 million.

And of course, there are people gaming the system or just being unmotivated. As this article is being written, the CARES Act’s unemployment benefits had just run out, affecting 11.6 million people. We’ll soon see if they go back to filling tough, dirty jobs.

But we’ll also see how much that job is worth. There are 10.1 million jobs to be had, so the numbers are in rough symmetry. Skills matching, though, becomes the real challenge. It is unlikely that, in the current environment, employers can go back to paying the pre-pandemic minimum wage of $7.25 per hour. When you consider that CEO pay has grown 1,322% since 1978 – a figure unsupported by stock value or earnings growth -- while average wages increased only 8.8%, the case can be made: The government subsidies weren’t too high. The prevailing wages were too low.

“Don’t work for your money …”

Regardless of how work changes, though, the old adage still has the ring of truth: “Don’t work for your money – make your money work for you.”

Easier said than done, of course. The years you spend gaining expertise in your field brings with it the opportunity cost of having blind spots in other areas of expertise. It’s always good advice to reach out to a respected financial professional for advice on how to manage your money – however you came by it.

-Rex

Rex Moxley

Rex Moxley joined Smith Anglin in 2001. Since then, he's served as a Managing Partner and as a member of the firm's Investment Committee. He regularly meets with prospective clients, counsels existing clients, participates in investment portfolio analysis and develops materials for communicating with the firm's clientele and target markets. He holds a BBA in Finance and Marketing, a graduate degree in Law and numerous securities licenses and designations.

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Market Overview

Pay us $10,000 in bitcoin or we’ll delete all your files

Protect yourself

Who’s watching your money?

Even so …

Have you been thinking about retirement?

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