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SEC pursues stock fraudster
NEWS
Consumers losing trust in online banking: survey
C
onsumers have less faith in online banking with 82% less likely to respond to emails from financial firms according to a survey.
In a further rejection of technology, 52% of respondents said they were “less likely” to sign-up for online banking. Crypto firm, RSA Security, interviewed 1,678 adults from eight countries and found 69% of respondents believed banks should replace username and password login with stronger authentication. More than half of respondents (58%) also believe banks should have stricter authentication controls for telephone banking. Four out of five account holders said they were unlikely to respond to an email from their bank for fear of it being a phishing message. Some banks guarantee to their customers that they would never communicate with them via email. But some firms, including Internet bank Egg, use email to send statements to their customers. The majority of respondents (82%) said they would like their bank to monitor access to their account online and telephone banking sessions for irregular activity. Although many banks have been implementing stronger authentication methods, only 39% of surveyed customers had noticed. “2006 was an eventful year for financial institutions in terms of ramping up their online banking security. Our survey affirms that the market is moving in the right direction, with more than 90% of consumers now willing to use stronger security when it is deployed, and this is something that banks should take into consideration when looking to accelerate their business,” said Christopher Young at RSA Security. Other results from the survey: • Nearly half (49%) said they would appreciate it if they could use the authentication token to log in to other websites in addition to their online banking site. 4
Computer Fraud & Security
• Fifty six percent of respondents said that they would like to use a personalised image to authenticate the online banking site. • Sixty nine percent of UK respondents were familiar with the term phishing. Sixty five percent were familiar with it in Australia while 83% understood it in the US.
HP conspirator pleads guilty
A
n alleged fraudster in the HewlettPackard spy controversy has pleaded guilty to deceitfully obtaining the telephone numbers of reporters and HP employees.
Bryan C Wagner (29) is the first HP conspirator to be convicted. He admitted to being paid as a contractor to find out who HP executives and reporters were in contact with by using their social security numbers and confidential details. The scandal involved investigators impersonating board members, employees and journalists to obtain phone records. HP conducted two investigations referred to as Kona I (stared in April 2005) and Kona II (launched in January 2006). One reason for the investigations was to find out potential sources of leaks to the press. HP hired consultancy firm, Security Outsourcing Solutions, to conduct covert investigations into employees’ activities. The company then turned to Floridabased Action Research Group, which hired Wagner to work on the investigations. He has been charged with being part of a conspiracy, which collected the personal information of HP board members, reporters at CNET CNET,, the Wall Street Journal Journal,, the New York Times and BusinessWeek as well as details of their families. Nebraska man Wagner pleaded guilty to creating email accounts to get access to the telephone records of HP targets. He admitted setting up an online telephone account in March 2006 in the name of a Wall Street Journal reporter, and used the journalist’s social security number to access his private records. The penalty for aggravated identity theft committed by Wagner is two years imprisonment and a maximum fine of US$250,000. The maximum penalty
for conspiracy is five years in prison, a US$250,000 fine and three years supervised release. He is expected to be sentenced in June.
SEC pursues stock fraudster
T
he US Securities and Exchange Commission has filed a complaint charging a student with artificially causing stock to rise before selling it on to make a huge profit.
Aleksey Kamardin (21) allegedly bought shares in 17 companies and conspired with hackers who compromised investors’ accounts to buy more of the thinly-traded stocks purchased by the student causing prices to inflate. It is thought Kamardin then sold off the shares, pocketing more than US$82,000 through the pump and dump scam. His aides allegedly compromised investors’ accounts and liquidated their existing equity positions using the money to buy the thinly traded stocks in concert with Kamardin. It is understood he sold and bought stock within the space of one or two hours. Mining company, Northwater Resources, experienced more than a doubling of its stock price. It opened at US$0.90 per share on 11 August and leaped to a 52-week high of US$2.09 per share allegedly thanks to Kamardin’s manipulation. It is understood he bought 7,640 shares at around 10 am and sold them at around US$2.00 per share around one hour later. He is also accused of targeting Fuego Entertainment causing its stock to rise from US$0.88 on 24 August 2006 to US$1.28 on the same day. Unauthorized intruders conspiring with Kamardin are thought to have hacked into accounts at Schwab, Scottrade, TD Ameritrade and E*Trade and bought 458,600 Fuego Entertainment shares. It is claimed Kamardin also bought and sold stock from aircraft supplier Gales Industries, trade exchange company ITEX Corp, and marketing company Mamma. com. The SEC complaint did not reveal the identities of the hackers who it claims assisted Kamardin in the scheme. February 2007
Consumers losing trust in online banking: survey
C
onsumers have less faith in online banking with 82% less likely to respond to emails from financial firms according to a survey.
In a further rejection of technology, 52% of respondents said they were “less likely” to sign-up for online banking. Crypto firm, RSA Security, interviewed 1,678 adults from eight countries and found 69% of respondents believed banks should replace username and password login with stronger authentication. More than half of respondents (58%) also believe banks should have stricter authentication controls for telephone banking. Four out of five account holders said they were unlikely to respond to an email from their bank for fear of it being a phishing message. Some banks guarantee to their customers that they would never communicate with them via email. But some firms, including Internet bank Egg, use email to send statements to their customers. The majority of respondents (82%) said they would like their bank to monitor access to their account online and telephone banking sessions for irregular activity. Although many banks have been implementing stronger authentication methods, only 39% of surveyed customers had noticed. “2006 was an eventful year for financial institutions in terms of ramping up their online banking security. Our survey affirms that the market is moving in the right direction, with more than 90% of consumers now willing to use stronger security when it is deployed, and this is something that banks should take into consideration when looking to accelerate their business,” said Christopher Young at RSA Security. Other results from the survey: • Nearly half (49%) said they would appreciate it if they could use the authentication token to log in to other websites in addition to their online banking site. 4
Computer Fraud & Security
• Fifty six percent of respondents said that they would like to use a personalised image to authenticate the online banking site. • Sixty nine percent of UK respondents were familiar with the term phishing. Sixty five percent were familiar with it in Australia while 83% understood it in the US.
HP conspirator pleads guilty
A
n alleged fraudster in the HewlettPackard spy controversy has pleaded guilty to deceitfully obtaining the telephone numbers of reporters and HP employees.
Bryan C Wagner (29) is the first HP conspirator to be convicted. He admitted to being paid as a contractor to find out who HP executives and reporters were in contact with by using their social security numbers and confidential details. The scandal involved investigators impersonating board members, employees and journalists to obtain phone records. HP conducted two investigations referred to as Kona I (stared in April 2005) and Kona II (launched in January 2006). One reason for the investigations was to find out potential sources of leaks to the press. HP hired consultancy firm, Security Outsourcing Solutions, to conduct covert investigations into employees’ activities. The company then turned to Floridabased Action Research Group, which hired Wagner to work on the investigations. He has been charged with being part of a conspiracy, which collected the personal information of HP board members, reporters at CNET CNET,, the Wall Street Journal Journal,, the New York Times and BusinessWeek as well as details of their families. Nebraska man Wagner pleaded guilty to creating email accounts to get access to the telephone records of HP targets. He admitted setting up an online telephone account in March 2006 in the name of a Wall Street Journal reporter, and used the journalist’s social security number to access his private records. The penalty for aggravated identity theft committed by Wagner is two years imprisonment and a maximum fine of US$250,000. The maximum penalty
for conspiracy is five years in prison, a US$250,000 fine and three years supervised release. He is expected to be sentenced in June.
SEC pursues stock fraudster
T
he US Securities and Exchange Commission has filed a complaint charging a student with artificially causing stock to rise before selling it on to make a huge profit.
Aleksey Kamardin (21) allegedly bought shares in 17 companies and conspired with hackers who compromised investors’ accounts to buy more of the thinly-traded stocks purchased by the student causing prices to inflate. It is thought Kamardin then sold off the shares, pocketing more than US$82,000 through the pump and dump scam. His aides allegedly compromised investors’ accounts and liquidated their existing equity positions using the money to buy the thinly traded stocks in concert with Kamardin. It is understood he sold and bought stock within the space of one or two hours. Mining company, Northwater Resources, experienced more than a doubling of its stock price. It opened at US$0.90 per share on 11 August and leaped to a 52-week high of US$2.09 per share allegedly thanks to Kamardin’s manipulation. It is understood he bought 7,640 shares at around 10 am and sold them at around US$2.00 per share around one hour later. He is also accused of targeting Fuego Entertainment causing its stock to rise from US$0.88 on 24 August 2006 to US$1.28 on the same day. Unauthorized intruders conspiring with Kamardin are thought to have hacked into accounts at Schwab, Scottrade, TD Ameritrade and E*Trade and bought 458,600 Fuego Entertainment shares. It is claimed Kamardin also bought and sold stock from aircraft supplier Gales Industries, trade exchange company ITEX Corp, and marketing company Mamma. com. The SEC complaint did not reveal the identities of the hackers who it claims assisted Kamardin in the scheme. February 2007