ConnectOne in N.J. to Record 4Q Fraud-Related Charge

By Colin Wilhelm November 12, 2014, 10:44 a.m. EST 1 Min Read

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ConnectOne Bancorp in Englewood Cliffs, N.J., expects to record a charge in the fourth quarter tied to an online fraud scheme.

The $3.4 billion-asset company disclosed in its quarterly filing with the Securities and Exchange Commission that hackers targeted one of its customers, resulting in unauthorized transfers that the company said could total up to $1.5 million. ConnectOne said its own systems were not compromised, though investigation and recovery efforts are ongoing.

ConnectOne also disclosed in its filing that the fraud prompted it to review its internal control over funds transfer to determine how the fraud occurred. The company "determined that the internal control identified as critical to the process were present, but not functioning with sufficient precision." As a result, ConnectOne said it suffered a loss.

The company said that, following a review, the incident did not hurt results in prior quarters. ConnectOne will also evaluate its internal controls to determine whether enhancements are needed.

ConnectOne did not disclose a source of the hack, or exactly how it was discovered.

Colin Wilhelm