What If My Company Computer is Hacked?

Funds transfer fraud and computer fraud are serious and growing threats to business. According to a 2008 survey by the Computer Security Institute, the average annual losses due to computer fraud were $289,000 and nearly $500,000 for financial fraud.

“Phishing” scams make it easier than ever for criminals to access your assets. Web-based commercial EFT origination applications are being targeted by malicious software, including Trojan Horse programs, key loggers and other spoofing techniques designed to circumvent online authentication methods. These attacks could result in monetary losses to financial institutions and their customers if not detected quickly.

Consider these examples:

A company’s finance director opened an email with an attached zip file that contained a virus. The virus obtained the user ID and password to the company’s bank account. Immediately thereafter, a fraudulent electronic wire transfer initiated by unknown persons caused $147,000 to be wired from the company’s bank account to an unknown account.

A company’s website was hacked by an employee of one of its customers who changed her employer’s bank routing code on the website to her own. When the company paid her employer for services rendered, the money went directly into her bank account.

While internal controls are extremely important to guard against these threats, they are not foolproof. Crime insurance is an effective backstop if you expand the policy to include Computer Fraud and Funds Transfer Fraud coverage. It is recommended to have limits equivalent to employee dishonesty limits sufficient enough to protect against a catastrophic attack.

Post by Brian Sandy for TechAssure

TechAssure Association, Inc., is a non-profit organization founded in 2001 for insurance and risk management professionals dedicated to serving clients in the Technology, Life Sciences, Digital Media, and Venture Capital industries.

So When Are Retirement Plan Fees Unconscionable?

Do the 401k Fees of Your Company 401k Plan Put You at Risk?

The New York Times had an interesting piece on 401K fees and whether and when they put the plan fiduciaries at risk:

Employers are supposed to act as a fiduciary when running a retirement plan, which is a legal way of saying that they are supposed to put your interests first. But in the context of fees, they must only keep them “reasonable.”

And there aren’t many specific definitions of what is unreasonable, for a couple of reasons. Benchmarking against other plans has traditionally been difficult, given that employers themselves often don’t know exactly what their plan costs. “If you don’t know what everyone else is paying, there is no way to know what is reasonable,” says Mike Alfred, BrightScope’s co-founder and chief executive, whose team has gathered information on 47,000 plans so far and sorted it by peer group.
. . .
DISCLOSING FEES Thankfully, the basic question of what fees you’re paying in your 401(k) or 403(b) is about to become easier to answer. Starting in 2012, according to new Labor Department guidelines, investment and other companies like Fidelity, which is a party to the ABB lawsuit, will need to be more clear with employers about how they are charging them.

Employers, in turn, will have to itemize more information on plan fees and expenses on account statements. In addition, they will need to display the costs of each mutual fund or other investment in a way that makes it easier for employees to compare their choices.

While it’s not yet clear how all of this will work in practice, there is real potential here for employers, especially executives at smaller ones for whom managing the retirement plan is one of dozens of duties, to get a harsh wake-up call about the size of their annual bill. And even if they don’t, their employees may see a menu of high-cost funds staring them in the face and begin to ask for a better plan.

To read more of this article in the New York Times go HERE

It’s Not About You

I read an excellent op-ed piece by David Brooks in the New York Times. I have excerpted a few gems below. Please follow the link at the bottom of this post to read the entire piece.

Over the past few weeks, America’s colleges have sent another class of graduates off into the world. They enter a bad job market, the hangover from decades of excessive borrowing. They inherit a ruinous federal debt.

This year’s graduates are members of the most supervised generation in American history. Through their childhoods and teenage years, they have been monitored, tutored, coached and honed to an unprecedented degree. Yet upon graduation they will enter a world that is unprecedentedly wide open and unstructured. Most of them will not quickly get married, buy a home and have kids, as previous generations did. Instead, they will confront amazingly diverse job markets, social landscapes and lifestyle niches. Most will spend a decade wandering from job to job and clique to clique, searching for a role.

No one would design a system of extreme supervision to prepare people for a decade of extreme openness. But this is exactly what has emerged in modern America. College students are raised in an environment that demands one set of navigational skills, and they are then cast out into a different environment requiring a different set of skills, which they have to figure out on their own.

. . .

But, of course, this mantra misleads on nearly every front.

College grads are often sent out into the world amid rapturous talk of limitless possibilities. But this talk is of no help to the central business of adulthood, finding serious things to tie yourself down to. The successful young adult is beginning to make sacred commitments — to a spouse, a community and calling — yet mostly hears about freedom and autonomy.

. . .

Most successful young people don’t look inside and then plan a life. They look outside and find a problem, which summons their life. A relative suffers from Alzheimer’s and a young woman feels called to help cure that disease. A young man works under a miserable boss and must develop management skills so his department can function. Another young woman finds herself confronted by an opportunity she never thought of in a job category she never imagined. This wasn’t in her plans, but this is where she can make her contribution.

Most people don’t form a self and then lead a life. They are called by a problem, and the self is constructed gradually by their calling.

. . . When you read a biography of someone you admire, it’s rarely the things that made them happy that compel your admiration. It’s the things they did to court unhappiness — the things they did that were arduous and miserable, which sometimes cost them friends and aroused hatred. It’s excellence, not happiness, that we admire most.

. . .

Today’s grads enter a cultural climate that preaches the self as the center of a life. But, of course, as they age, they’ll discover that the tasks of a life are at the center. Fulfillment is a byproduct of how people engage their tasks, and can’t be pursued directly. . . . It’s nonetheless true that life comes to a point only in those moments when the self dissolves into some task. The purpose in life is not to find yourself. It’s to lose yourself.

To read the entire op-ed article by David Brooks please go to the New York Times HERE

Workers Compensation and Recreational Injuries

Here in Utah, the “gold standard” for deciding whether or not a recreational injury is compensable under workers compensation comes from a Utah Supreme Court case titled “Blacks vs. McDonald’s”. The court’s decision listed four tests for what constitutes a compensable injury under workers compensation. These four tests are as follows:

1. Time and place. Recreational games scheduled during work hours on company premises are usually found to be work-related. Even when only the first of these four elements is present, the Utah Supreme Court has found that with regard to time and place “the case has made a strong start.” Id. at Sec. 22.24(b). Where games are scheduled off premises and after hours, the burden of proving a work connection falls heavily on the other three factors set out immediately below.
2. Degree of employer initiative, promotion, and sponsorship. When sufficiently present, these elements clearly point toward sufficient control to identify the activity with the employment. Though not decisive, presence of these elements tends to support compensability.
3. Financial support and equipment furnished by employer. Standing alone, these elements are not sufficient to make the recreational activity work related, but will weigh in the aggregate.
4. Employer benefit. This factor plays a supporting rather than an independently decisive role as well. Intangible values, such as increased work efficiency and morale, are insufficient to link the activity to the employment.

Applying these tests is highly subjective. Where the employer or workers compensation carrier might see no coverage, it is always possible that an administrative (labor) law judge will feel otherwise.

Courts in a number of states have formulated similar tests. Although there are similarities, there can be substantial differences. In fact, a number of states specifically exclude coverage for injuries suffered while the employee was participating in voluntary recreational activities, provided that participation was not a job requirement.

Important note: the foregoing discussion must not be viewed as legal advice. We always recommend that this issue be discussed thoroughly with in-house counsel or a labor attorney.