Japan warns of hundreds of millions of dollars in unauthorized trades from hacked accounts

Japanese regulators published an urgent warning about hundreds of millions of dollars worth of unauthorized trades being conducted on hacked brokerage accounts in the country. 

Japan’s Financial Services Agency (FSA) said on Friday that there has been a “sharp increase in the number of cases of unauthorized access and unauthorized trading” through online trading services. 

The trend was occurring, according to the agency, because of stolen customer information obtained through phishing websites “disguised as websites of real securities companies.”

As of April 16, the FSA said 12 securities firms reported fraudulent transactions, with sales totaling about $350 million and purchases worth about $315 million. 

“There are various types of fraudulent transactions, but in most cases, the fraudsters gain unauthorized access to victim accounts and manipulate them to sell stocks etc. in the accounts, and use the proceeds to buy Chinese stocks etc,” officials explained. 

“As a result of the fraudulent transactions, the Chinese stocks etc. remain in the victim accounts.”

The agency noted that there “may still be cases of unauthorized access or fraudulent transactions that have not yet been discovered.”

According to the figures reported to the FSA, accounts were accessed illegally more than 3,300 times and there were 1,454 fraudulent transactions. 

Bloomberg reported that some of the firms notifying the FSA of incidents include Rakuten Securities Inc., Nomura Holdings Inc., SMBC Nikko Securities Inc. and SBI Holdings Inc.

During a press conference on Friday, the FSA said brokerages will be covering the losses suffered by their customers

Japan has increasingly warned its citizens of cyberattacks targeting the country from China. At the Munich Cyber Security Conference last year, a senior official within the country’s National Center of Incident Readiness and Strategy for Cybersecurity said China-backed hackers are increasingly targeting telecom carriers, internet providers and other critical infrastructure.