Leoni AG, a Germany-based supplier of wires, cables and wiring systems, has fallen victim to fraud with the help of falsified documents and identities and the use of electronic communication channels, the company has announced. As a result, company funds were transferred to accounts abroad.
The CFO of one of Leoni’s factories in Romania allegedly transferred €40m following an e-mail received from the headquarters in Nuremberg, Germany. A few days later, they realized they fell victim to an email impersonation scam since the money never reached the intended recipient.
“The Management Board immediately launched an investigation into the events and is currently assessing claims for damages and insurance claims,” the company said in a press release. “It has also reported the matter to the police criminal investigators. The damage amounts to an outflow of liquidity totaling around EUR 40 million. The criminal activities have not affected the IT infrastructure or data security”.
Leoni’s share price fell more than 5% to 33.3 euros after the announcement. It reached a low of 32.8 euros on Aug. 29. Leoni has a market capitalization of 1.08 billion euros.
“The extent to which the damage will affect the projected net income for the year cannot at present be assessed. The liquidity situation of the Leoni Group has not been adversely affected in any material way. The performance of Leoni’s operations is in line with the forecast,” Leoni officials said.
Total losses caused by Business Email Compromise (BEC), a sophisticated scam targeting businesses working with foreign suppliers and businesses that regularly pay by wire transfer, have grown 13-fold since January, as measured by identified exposed losses, to over $3 billion, the FBI said this summer, cited by Business Insights. The BEC scam claimed 22,143 domestic and international victims, and inflicted a combined exposed dollar loss of $3,086,250,090, which includes actual and attempted loss.
Here is a short list of FBI recommendations to avoid BEC scams:
Former business journalist, Razvan is passionate about supporting SMEs into building communities and exchanging knowledge on entrepreneurship. He enjoys having innovative approaches on hot topics and thinks that the massive amount of information that attacks us on a daily basis via TV and internet makes us less informed than we even think. The lack of relevance is the main issue in nowadays environment so he plans to emphasize real news on Bitdefender blogs.View all posts
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