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Phishing & Training Services for Investment Firms: Outsmart Cybercriminals, Empower Employees

By Katie Sloane,
Thursday, June 23rd, 2016

In an alert posted to its website, the U.S. Federal Bureau of Investigation (FBI) stated that phishing email scams requesting wire fraud transfers have cost firms more than $2.3 billion in losses since 2013.

Eze Managed Phishing for Fund ManagersAt the root of a phishing email scam is in-depth reconnaissance during which the cybercriminal delves into employees's personal information and the organization’s processes. During this phase, schemers phish languages within email threads and obtain enough information to pinpoint money-managing employees within the firm. Equipped with this insider information, the criminal sends a spoofed email, assuming the identity of the firm’s CEO or other senior executive, to an employee responsible for managing funds and requests an illegitimate wire transfer. Typically, the message will relay a sense of urgency – a key factor in the fraud's success.

According to the FBI, these email scams have increased by 270 percent (%) since January 2015. With the rise of these incipient, sophisticated attacks, the need for fully managed phishing and training programs grows exponentially. Breaches will happen, but when employees are provided with the tools and knowledge needed to recognize fraudulent emails, risk decreases and a firm’s defense system becomes stronger and more agile.
 

Categorized under: Security  Private Equity  Hedge Fund Due Diligence  Hedge Fund Operations  Hedge Fund Regulation  Outsourcing  Trends We're Seeing 



SEC Levies Fine, Reaffirms Focus on Cyber Security Planning & Data Safeguarding

By Kaleigh Alessandro,
Thursday, June 9th, 2016

In case you missed it, the SEC just announced this week that it levied a $1 million fine to a prominent financial services firm for failing to adopt written policies and procedures reasonably designed to protect customer data. The SEC also stated it expects “SEC registrants of all sizes to have policies and procedures that are reasonably designed to protect customer information.”

Eze Castle Integration and Sadis & Goldberg just published ‘A Fund Manager’s Cyber Security Action Plan’ that covers what the SEC expects from managers. You can download the paper at www.eci.com/cyberplan or read an excerpt below.

SEC Cybersecurity - Chronology of Regulatory Events

Cybersecurity has fast become an imminent and pervasive threat to the investment management industry. Investment advisers, including those managing private funds (“Fund Managers”) are required to disclose and report a higher quantum of more sensitive and meaningful information than ever before, via Form ADV, Form PF, CPO-PQR and (for some Fund Managers) Annex IV. Cyber-attacks can be manifested in a variety of ways from multiple sources and can lead to direct losses (e.g., theft of funds, data or other property), reputational harm, regulatory actions, third party litigation and other forms of liability. 

While it’s reasonable to believe that a typical CFO would not respond to a “spear-phishing” email from a fictional Nigerian prince, consider the risks presented by a more realistic cyber-attack wherein a personal email is sent to the CFO, purporting to be from your prime broker, auditor or administrator (information discoverable from your Form ADV), mimicking the patterns and style of previous email communications (discoverable from your email server) and asking for confirmation of a recent wire or some other sinister request. Internal attacks such as this are discussed further throughout this paper, and each one has the potential to cripple a fund and/or damage thousands of investors. 

Categorized under: Security  Hedge Fund Operations  Hedge Fund Regulation  Infrastructure  Trends We're Seeing 



Examining the Evolution of Investor IT Due Diligence

By Kaleigh Alessandro,
Tuesday, June 7th, 2016

The below information is an excerpt from Eze Castle Integration’s 2016 webinar: The Evolution of Investor IT Due Diligence.
 
Investors have long been asking questions about firm operations and even technology. But with the way IT has evolved over the last 5-10 years, it’s no wonder investor inquiries have changed in both size and scope. Of course, in addition to technology evolution, we’ve also seen influences on the regulatory side, as the SEC continues to examine and evaluate firms’ security practices, which ties heavily into technology.
 
In looking back, it’s not unfair to say that 10 years ago, technology was what we’d call a “check the box” category. An investor due diligence questionnaire may have been one or two pages and focus mostly on firm investment history, performance, etc. On the IT side, it may have said “are you using an outsourced IT provider” or even “do you have a disaster recovery system” but beyond that, there was very little inquiry into the types of technologies being used at hedge funds as well as the protections in place to mitigate risk.
 
Of course, times have changed and now we see investor DDQ documents upwards of 5-10-20 pages in length and asking great levels of detail about technology, cybersecurity and operations. So let’s talk a little bit more about the influences for this due diligence evolution. 

Categorized under: Hedge Fund Due Diligence  Cloud Computing  Security  Disaster Recovery  Hedge Fund Operations  Hedge Fund Regulation  Infrastructure  Communications  Outsourcing  Business Continuity Planning  Trends We're Seeing 



The Pros and Cons of Public and Private Clouds

By Kaleigh Alessandro,
Tuesday, May 31st, 2016

It’s no secret that investment manangement firms (including hedge funds and private equity firms) have historically been divided over the use of public and private clouds. We’ve discussed it in depth here on the Hedge IT Blog, explaining the differences between the two and why most funds are choosing to go with a private cloud solution.
 
A case can be made, however, that there’s a time and a place for each cloud platform and both offer their own advantages for financial services firms. We’ve taken a look at some of the key areas firms will consider when looking at public and private clouds and identified which we think comes out on top.

Service & Support

Investment firms demand uptime to ensure operational efficiency and profitability. Public cloud providers, however, do not offer investment-specific IT support and rather have limited customer service representatives troubleshooting the most basic of email and desktop support issues.

Categorized under: Cloud Computing  Security  Private Equity  Hedge Fund Operations  Hedge Fund Regulation  Outsourcing  Help Desk  Infrastructure  Trends We're Seeing 



Five Security Practices Your Firm Had Better Get Right (Tech Tips Video)

By Kaleigh Alessandro,
Tuesday, May 24th, 2016

It's time for another Tech Tip video! Today, we have five security practices your investment firm should not overlook. Watch and learn! 

 

 

Categorized under: Security  Hedge Fund Operations  Infrastructure  Communications  Trends We're Seeing  Videos And Infographics 



Grading your cloud provider: four critical criteria

By Kaleigh Alessandro,
Thursday, May 19th, 2016

This article was written by Bob Guilbert, Managing Director, and first appeared in Hedgeweek's 2016 Guide to Setting Up an Alternative Investment Fund in the USA. Bob Guilbert, Eze Castle Integration

You're a new fund manager, and somewhere on your task list the letters "IT" are probably followed by a question mark. Odds are, you don't have a technology background, so as your firm's Chief Operating/Financial/Compliance Officer (or in some cases, Portfolio Manager), the sudden responsibility you've undertaken as your firm's de facto IT Manager is intimidating at best. 

The good news is, as a startup, your IT options are pretty clear. In 2016, there's no better technology decision a new firm can make than selecting a cloud platform – an infrastructure that has proven benefits including scalability, flexibility and robust security, among others. And while the thought of hosting IT offsite was once a worry for allocators, today's investors find comfort in knowing hedge fund and alternative investment firms are focusing on their investment priorities and leaving the technology decisions to the experts. 

From our perspective, the cloud is now a tried and tested infrastructure environment that is acceptable to the institutional investor community. They have become very thorough in their operational due diligence process, understanding exactly what cloud providers provide from an operational, management and security perspective. This has allowed managers to become much more comfortable at appointing a cloud provider to deliver an infrastructure that will perform well in any type of trading environment. 

Where managers need to spend their time is deciding on the best cloud provider to work with, as opposed to thinking about whether or not they should use a cloud provider in the first place.

And how exactly do emerging fund managers embark on that decision-making process? 

Categorized under: Launching A Hedge Fund  Cloud Computing  Security  Hedge Fund Due Diligence  Hedge Fund Operations  Outsourcing  Infrastructure  Communications  Trends We're Seeing 



Phishing and Wire Transfer Scams Abound, Educate Employees Now

By Mary Beth Hamilton,
Thursday, May 5th, 2016

The importance of employee security awareness cannot be understated. We hear and read stories too often about employees being victims of social engineering schemes. From downloading a malicious virus to falling for a wire transfer scam, these occurrences not only have financial implications to an investment firm but can also impact an employee personally and directly.

Most employees who fall prey to social engineering tactics never intend to hurt a company. In cases of wire transfer scams, for example, often an employee doesn’t follow the appropriate checks and balances at the firm or is being too "responsive" in order to impress a colleague or boss.

Just last week we learned of yet another inbound ransomware email (subject line: debt fax from <your domain here>) that had the ability to impact hedge funds if opened by an employee.

Pop Quiz: Phishing Email Example

Following is an example of the type of phishing or imposter emails that enter employees’ inboxes. Would your employees catch at least one of the items that make this email suspicious? Note the sender email address, which includes Eze Castle Integration’s domain, the balance due amount and the type of company (medical) sending the invoice. You may (and hopefully do) have advanced email security mechanisms in place, but you still have to train your employees because scams are only going to get more sophisticated.

Phishing Email Example Targeting Hedge Funds

Security Awareness Tips for Your Hedge Fund Employees

Phishing attempts can occur via email, phone, instant message, SMS or social media. Here’s what to look out for:

  • Check the sender email address as well as “to” and “cc” fields

  • Is it personalized? Be wary of generic greetings

  • Improper spelling and grammar can be giveaways as well

Categorized under: Security  Trends We're Seeing 



Five Qualities to Look for in a 24x7 Help Desk

By Eze Castle Integration,
Tuesday, May 3rd, 2016

When evaluating technology providers, there are a number of factors to consider when determining which is the best fit for your firm. One important, and often overlooked, criterion is the quality of the Help Desk. Alternative investment firms rely heavily on technology, but no technology is completely infallible. In the event of an unexpected issue, having a knowledgeable, experienced Help Desk at your fingertips is essential.

Help Desk - Customer Support

So, what makes an exceptional Help Desk?

In this article, we will take a look at some critical considerations and provide guidelines for what to look for when selecting a Help Desk provider for your firm. 

Categorized under: Help Desk  Trends We're Seeing 



Hedge Fund Technology for Startups: Mistakes to Avoid and Guidance for Success

By Zorela Georgescu ,
Thursday, April 28th, 2016

The financial services industry is currently under tremendous pressure to meet both investor and due diligence requirements. Thus, it is increasingly important to maximize technology to meet these pressures. To conclude our six-part hedge fund launch webinar series, we spoke with Eze Castle Integration’s own managing director Vinod Paul, who shared insights about current IT challenges and demands and how today’s hedge funds can employ best practices for operational excellence.

Key Priorities for New Managers

Paul defined cybersecurity and scalability as two primary technology considerations for new managers. You must first understand your firm’s specific vulnerabilities and exposures. One of the most common mistakes new launches make, according to Paul, is assuming that they only require the basic bare minimum in terms of technology. He urges new managers to pick an IT solution with operational growth in mind -- considering the business not at the onset, but in three to five years.

Service Provider Selection Criteria

Paul continued to place emphasis on customized IT, stating that when it comes to outsourcing, it is imperative that a firm carries out proper due diligence in choosing a provider to meet the firm’s unique needs. “You want enter into a true partnership that offers open lines of communication, flexibility, and ultimately, trust and accountability,” he said. Brand and reputation, long lasting relationships with clients, and industry experience are some of criteria Paul feels are most important when selecting a service provider. “Don’t step in to it with the attitude that a current provider is good enough, for right now,” he cautioned. The service provider should not only address day-to-day operations but also anticipate potential problems down the road.

Categorized under: Launching A Hedge Fund  Cloud Computing  Security  Hedge Fund Operations  Infrastructure  Outsourcing  Trends We're Seeing 



Spring Cleaning Tips for Securing Your Digital Footprint

By Zorela Georgescu,
Tuesday, April 26th, 2016

Freshness, simplicity, clarity. Words we may use to describe the Spring season. While we wait for warmer winds to come sweep away the chaos of winter, it may also be time to freshen up our digital ecosystems.  Below are some tips to help with your spring cleaning process, whether you are looking to tighten up your personal security situation or aiming to stay on top of enterprise-wide security concerns for the sake of your business.

security spring cleaning
  • Get rid of “junk”. Old photos, videos, and archives take up disc space and slow performance.

  • Check up on unused software. First, see what it’s actual purpose is. If it’s not something you use or need, uninstall. This will reduce potential malware-targeted software.

  • Install program updates. Updates include critical security patches that combat ever-morphing computer viruses.

  • Refresh passwords. Make sure your passwords vary across different platforms. Use a combination of numbers, special characters, and upper and lowercase letters. If you are an administrator, flag accounts that have not undergone a password change in three months.

Categorized under: Trends We're Seeing 



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