Online or off, some believe vultures are everywhere

Here’s the bottom line that Col. Matteo Martemucci, commander of the U.S. Air Force’s 318th Cyberspace Operations Group, delivered to area financial analysts on the topic of cyber security: “If you’ve got an IP address, you’re vulnerable.”

The colonel’s warning didn’t help the members of the CFA Society of Pittsburgh, who turned out for his presentation Wednesday, to digest their Duquesne Club lunches.

Nor did his accounts of various cyber exploits, including last year’s federal indictment of five Chinese army officials accused of victimizing U.S. Steel, Westinghouse Electric, Alcoa, Allegheny Technologies and the United Steelworkers union. The five, including someone nicknamed “Ugly Gorilla,” were indicted last May for economic espionage, theft of trade secrets and other charges.

“China doesn’t care that we’re implicating these people. ... They continue to steal and steal and steal,” Col. Martemucci said while his audience tried to enjoy their macaroons. “We’re never going to extradite those people. They’re never going to stand trial.”

Col. Martemucci said the U.S. has the most to lose in cyber warfare.

Countries such as North Korea, implicated in the attack on Sony Pictures Entertainment over the movie “The Interview,” aren’t vulnerable because much of that country lacks electricity and few people have access to computers.

Hackers steal up to $400 billion a year in cash and intellectual property from U.S. victims, he said.

He also had some words of caution about “smart” thermostats that allow users to control their home climate remotely through their smartphones or other electronic devices.

“Those in my business think of the smart grid as the vulnerable grid,” he said.

Sen. Elizabeth Warren, D-Mass., says insurance companies offering generous incentives to agents who sell annuities have some explaining to do.

Last week, Ms. Warren sent letters to the 15 insurance companies that logged the highest sales of individual annuities last year.

“I am concerned that these incentives present a conflict of interest for agents and financial advisers that could result in these agents providing inadequate advice about annuities to investors and selling products that may not meet the retirement investment needs of their buyers,” she wrote in the letters.

She said the incentives include cash awards of $80,000 or more, cruises, iPads and “diamond-encrusted ‘NFL Super Bowl Style’ rings.”

Ms. Warren wrote that although everyone in the industry knows about the incentives, there hasn’t

been much public discussion about them “or the impact that these kickbacks may have on agent behavior.”

She asked for information about the nature of the incentives, how many were awarded, their value, as well as for company policies for disclosing potential conflicts of interest.

In their most basic form, annuities are insurance contracts that provide a guaranteed stream of income over the life of the policyholder. Some offer continued income to a beneficiary after a policyholder dies. There are circumstances in which they make sense. The 2008 crash and other events have increased interest in annuities because of the retirement income they can provide.

However, practices relating to the sale of annuities are typically among the biggest source of investor complaints. Their complexity means some people do not know what they are buying or how much they are paying in fees.

Sometimes, agents convince policyholders to exchange one type of annuity for another, which involves surrender charges that reduce a policyholder’s savings and boost the agent’s income.

Responding to Ms. Warren’s epistle, the American Council of Life Insurers said annuities “help people save and then provide a guaranteed stream of retirement income they can’t outlive.” The industry group said insurers must comply with a host of federal and state regulations that require extensive disclosure, truth in advertising, and that an annuity is a suitable product for the person buying it.

In short, whether it is your smart thermostat or your retirement savings, be careful out there.