Fund Losses Rise Steeply with Computer Intrusions

In 2007, computer invasion for companies that manage future trades and securities reported a 47% growth in the total count of suspicious and fraudulent transactions, according to FinCEN (Financial Crimes Enforcement Network) in its "SAR Activity Review - By the Numbers", a data compilation released on February 11, 2008.

The data, collected from SARs (Suspicious Activity Reports) presented in 2007, showed a steep hike in the total amount of lost funds from businesses, consumers, and banks during 2007 because of malware attacks and computer hacking. The Wall Street trading giants too had to face the significant increase in fraud from computer intrusions last year.

According to the author George Manning, who wrote the book "Financial Investigation and Forensic", computer intrusion actually means to access the data and files on someone else's system, particularly of a bank or other financial institution to illegally procure funds, as reported by Washingtonpost on February 20, 2008.

Officials at FinCEN relate that trading institutions reported more cases of securities fraud due to computer intrusions in 2007 than in 2006. Money Laundering or structuring remains the predominant occurrence at 48% in reports by depository institutions, according to SARs. Other consistently represented frauds were Check Fraud (10.5%), Counterfeit Check (4.9%), Credit Card Fraud (4.8%), Mortgage Loan Fraud (3.9%), Check Kiting (3.3%), and Identity Theft (2.4%).

Cyber miscreants are also trying to compromise online accounts of stock trading in the same way as hacking into Internet banking accounts. One explanation of these hikes might be the significant increase in the amount of spoof 'pump-and-dump' stock scams/spam.

According to the SAR's data, banks in majority of the cases are unable to relate exactly how online criminals are embezzling with their funds. About 80% of the cases of computer intrusions grouped as unlawful access to Internet banking that have risen by multiple levels in 2007.

Financial fraud analyst at Gartner Inc., Avivah Litan, said that illegal wire transfers affect more of the small and medium enterprises that might be having online banking services but have little strict financial controls like that present in larger corporations, as reported by Washingtonpost on February 20, 2008.

» SPAMfighter News - 3/3/2008