Payments: Even in today’s world of high security, big bank blunders beggar belief

Beware! Investec was supposed to return client funds to CME Group, but attempted to send them to me instead, with absolutely no data security whatsoever.

Internet cyber security, all-encompassing compliance procedures, highly technologically advanced customer and supply chain management software and astute cross-referencing are all part and parcel of today’s banking industry.

Payments of invoices to suppliers, withdrawals from trading accounts and the safe custodianship of client money are hugely instrumental areas within our electronic trading and online financial services industry worldwide to the point of regulators making strict rulings on how client assets should be held, and who should hold them and supervise them.

However, what if a major bank decided to send the funds that were supposed to be credited to a major executing venue – CME Group for example – to a private individual, whilst at the same time sending an email and divulging all kinds of confidential information willy-nilly over the telephone?

And what if that private individual was, perchance, to be me.

Surely not.

This week, I received an email from the London-based accounts department of South African financial giant Investec.

Investec is an international banking and wealth management group founded in Sandton, the wealthy financial district of Johannesburg, in 1974 and is listed on both the Johannesburg Stock Exchange and the London Stock Exchange.

The email, complete with a spelling mistake in the signature area, misdefining the Accounts Payable department, appeared completely implausible when it arrived, as it pertained to an invoice which does not exist, and was sufficiently sparsely detailed to make me think, along with the spelling mistake, that this was an attempt to defraud.

Thus, I made a call to the Accounts Payable department of Investec on the telephone contact number listed on the email, which was answered by a lady who did not state where I had reached, but just with a straight forward “hello” as though I had contacted a domestic telephone line.

I then had to establish with whom I was speaking, and then make the enquiry as to what this email pertained. The reply was “Oh, you’re not CME Group?”.

I could have at that point said yes it is, and then taken provided details and received the funds. Or, I could have provided bank details and had them used for nefarious purposes.

Yes, in this particular instance, it was a small amount, only £500, however that is £500 of a client’s trade settlement, therefore exposing tremendous data security breach, as I had become privy to details, and also the potential for me to quite easily make off with client money. What if it was $1 million, and it had been someone more easily tempted and less honest than me on the receiving end?

Investec, led by incumbent CEO Fani Titi – and yes, you did read that correctly – has operating revenues of £689 million in 2019, and is a sizeable wealth management company that operates across all asset classes and trades with all major derivatives venues, including in this case CME Group.

We may well have the most sophisticated technology, the highest form of regulatory supervision, specially designed accounting and payments solutions which use algorithms to ensure validity via merchant services providers and bank payment systems as well as dedicated highly advanced software companies which specialize in providing secure payment solutions for financial services companies and electronic trading entities.

However, without the human eye on the ball, these are quite simply fallible.

Ergo, it is advisable for all electronic trading and derivatives exchange companies which use custodian banks to make sure that this type of glaring error does not occur.

Mind how you go….



Read this next

Industry News

21 Republican representatives want to “End the Fed”

“Americans are suffering under crippling inflation, and the Federal Reserve is to blame.”

Retail FX

Scope Markets launches unleveraged trading

“Whilst our traditional contract for difference (CFD) products continue to prove incredibly popular, the Invest account is unleveraged and only allows ‘long’ positions to be taken, a combination that significantly reduces the risk of capital losses.”


Unlocking Profit Potential: Earn Returns with DecodeEX Experience Bonus!

DecodeEX, the innovative brokerage subsidiary of Decode Global, announced its experience bonus campaign, offering every user the opportunity to maximize their strategic trading potential with up to $10,000 in experience bonus. 

Market News

Pretiorates’ Thoughts 28 – Precious metals and base metals out of control

Ten days ago we mentioned in Pretiorates’ Thoughts 26: Chapter 2 should start with Precious Metals.

Retail FX

Webull launches discount brokerage in Malaysia

“Making investing more inclusive and accessible to all, Webull Malaysia brings best-in-class tools and information to empower investors of all levels with knowledge and skills to help them make better investment decisions and achieve their investment goals.”

Digital Assets

Hidden Road adds OKX’s Nitro Spreads into prime brokerage

“Hidden Road continually seeks to increase market access and capital efficiency through expanded prime brokerage offerings. Integrating OKX’s Nitro Spreads product builds upon this philosophy by extending our counterparties’ ability to execute risk-managed arbitrage strategies.”


Dev Release 31: BlockDAG’s SHA-3 Upgrades Propel Crypto Mining Innovation as Miner Sales Approach 5800 Units

Learn about BlockDAG’s 31st Development Release, which includes advanced SHA-3 updates and a significant increase in miner sales, driving advancements.


BlockDAG Dominates 2024 Crypto Trends: Surpasses $28M in Presales Amid Strategic Partnerships

Explore BlockDAG, Shiba Inu, and Kaspa Killer’s rise in 2024’s crypto market, focusing on BlockDAG’s $28M presales, strategic partnerships, and innovative technology.


BlockDAG’s $30 by 2030 Valuation Prediction and Roadmap Reveal Gains Traction From Filecoin and XLM Investors

Discover why BDAG’s $30 price prediction by 2030 outshines Filecoin Investors’ hopes and XLM’s recent surge with a booming presale and clear roadmap.