Stolen Deals? How One Funder Used Technology to Say ‘No More’
It’s another chapter in the saga of stolen deals, a problem that shops all over the country seem to be grappling with. For Miami-based Greenbox Capital, company CEO Jordan Fein hoped it was something that they didn’t have to worry about. But believing it was better to be safe than sorry, Greenbox launched a 90-day probe to review all controls and personnel to see if theft existed in their organization and how it was being done. They weren’t too happy with the results, which determined that there was indeed employee theft taking place.
Sources across the industry have told deBanked that some employees will do things that make it easy to catch them, while others say that their tactics are constantly evolving. Disabling the USB ports isn’t enough, they say, since personal smart phones can be used to covertly steal data by simply taking pictures of a computer screen. Some say that apps like Snapchat are even making it increasingly easy for them to erase the evidence trail.
For Greenbox Capital, the probe convinced them that being a funding company meant they also needed to become a top-notch security company, especially since they are being entrusted with sensitive information. It’s their ISOs’ deals they have to protect, they say. Understanding how important that is, the company designed proprietary software to monitor the actions of all users on their system, which allows them to know who clicked on what when, and for how long. But that wasn’t enough, they insist. They also developed algorithms to detect suspicious behavior and their security team receives an alert whenever it gets triggered.
And it’s not just what someone clicked on or downloaded, they say, since their system also analyzes phone call activity, texting activity, wifi activity and the number of absences from one’s desk. The implication from that, of course, is that they must be incorporating video surveillance, which they confirmed they are.
They’re not alone. Chad Otar, CEO of Excel Capital Management, an ISO based in New York City, says that when it comes to their office, they have “eyes and ears everywhere.” Otar explains that because commission payouts can be so high, even experienced salespeople can feel tempted to risk their jobs to get their hands on good leads. Some will try to use different emails accounts on the office computer, using their private ones to transact information they’re not supposed to. To prevent that, they’re using Google Vault. “It allows us to monitor all emails going out and coming in from everyone’s account that is linked to the server,” he explains. “And if they try to access another email account, it blocks them.”
But even while threats like Snapchat exist, Otar says some employees will take a low-tech approach and hide valuable information in the trash bin and then offer or attempt to “take out the trash.”
For Greenbox, thanks to their new platform, they were actually able to catch two employees who were stealing data and actually selling deals on the black market.
A black market?
To put such behavior in perspective, 3 years ago, the name and phone number for someone qualified and interested in working capital could fetch $200 through normal lead channels. These days, sources say it can cost several thousand dollars in marketing just to fund a single deal and that a good lead is worth more than gold.
Greenbox believes that all companies should stop and take a close look at the controls they have in place to catch internal theft. Determined to prevent what they found from ever happening again, they say they now have the tightest internal controls in the industry and advise all businesses to rethink their approach to data security. “As it stands today there is no safer place to send your deals,” company CEO Jordan Fein says.
Of note, readers should stand to realize that getting caught might not just mean embarrassment or termination. Last year, a former MCA sales rep pled guilty to attempted criminal possession of computer related material for being on the receiving end of stolen deal information and using it. Since then, other companies have privately suggested that this was not the only deal-stealing situation that has involved law enforcement and that data theft is a serious offense.
Excel Capital Management‘s Otar says that if you create a sense of pride and loyalty in your workplace, your own employees will report any bad behavior they witness to you.
For Greenbox Capital, they believe their cloud-based system and advanced algorithm is not just about funding more deals, it’s about protecting the integrity of the entire process and maintaining trust.
Stealing deals? it’s not worth the risk.Last modified: August 13, 2018
Sean Murray is the President and Chief Editor of deBanked and the founder of the Broker Fair Conference. Connect with me on LinkedIn or follow me on twitter. You can view all future deBanked events here.