Changed the Windows security setting to:
Store passwords using reversible encryption = disabled (from 'enabled').
IBM Sterling Connect:Direct for Microsoft Windows processes then produce error LSMG244I.
Connect:Direct processes failing with LSMG244I, 'invalid userid or password'.
This is not a Connect:Direct issue.
For more information on this Windows security setting, see:
Diagnosing the problem
Connect:Direct diagnostics won't help, because for security reasons they do not show the proxy password. This policy defines the format that the OS will use to store passwords, not how Connect:Direct will store them.
The direction of changing the policy doesn't matter.
Resolving the problem
Seek further assistance from Microsoft.