OSD had a financial institution bond for insurance companies from Hartford. Two cases were at issue: one covering computer system fraud, the other covering fraud initiated via email. According to the complaint, external hackers participated in what the court described as a “spear phishing scheme” to gain access to the email account of OSD’s chief financial officer. Posing as the CFO, the hackers sent emails to other OSD employees with instructions to put funds into new investments, and changed settings within the account so that they could answer follow-up questions without arousing suspicion. The employees sent the money as per instructions. Over several weeks, OSD’s complaint alleged gross losses of approximately $7 million, of which approximately $3 million was later recovered – a net loss of approximately $4 million.
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