ASICAustralian Securities & Investments Commission

Electronic EnforcementElectronic EnforcementKeith InmanKeith Inman

October 2000October 2000

ASIC

ASIC & CyberspaceASIC & CyberspaceEntry barriers to crime have droppedEntry barriers to crime have dropped

– easy to use easy to use

– cheap cheap

– access to a very large consumer base access to a very large consumer base

– anonymous anonymous

ASIC

Old economy scamsOld economy scams

++ New economy scams New economy scams

== Significant increase in Significant increase in volumevolume

Trend?Trend?

ASIC

E-ScamsE-Scams– Illegal Investment schemes Illegal Investment schemes

• IPOs without prospectus

• Free Stock offers

• High Yield Schemes

• Exotic Schemes

– Market Manipulation Market Manipulation (Pump & Dump)(Pump & Dump)

– Unlicensed advice Unlicensed advice (Financial Gurus)(Financial Gurus)

– Non-Disclosure of interestsNon-Disclosure of interests

– Hawking Trading software Hawking Trading software

• Exaggerated claims

• Unlicensed advice

ASIC

Spam EmailBulletin Board Postings

ASIC

Independent Relay Servers

ASIC

IP 1 IP 2

Suspect 1

#1 #2

Suspect 2

Spam EmailBulletin Board Postings

ISPs

ASIC

The Challenge?The Challenge?Trace the sourceTrace the source

– Postings on BBsPostings on BBs

– SPAM emailsSPAM emails

Understand the technology Understand the technology – Content ProvidersContent Providers

– ISPsISPs

– Telecommunication Carriers Telecommunication Carriers

Gather & present evidenceGather & present evidence

ASIC

Dog years !!! Dog years !!! – 1 day = 1 month1 day = 1 month

The Challenge?The Challenge?

ASIC

What is ASIC doing?What is ASIC doing?

ASIC

ASIC

Leverage Web Leverage Web technologiestechnologies

Internal Learning & DevelopmentInternal Learning & Development

Consumer EducationConsumer Education

““Self Help” ResourcesSelf Help” Resources

DetectionDetection

ASIC

Electronic Enforcement Electronic Enforcement Unit Unit (EEU)(EEU)

Small, national teamSmall, national team““Centre of expertise”Centre of expertise”

Dedicated resourcesDedicated resourcesLegalLegalInvestigativeInvestigativeTechnicalTechnical

ASIC

National volunteer network of 60 National volunteer network of 60 staffstaff

Specialized web tracing/forensic Specialized web tracing/forensic computing trainingcomputing training

Linked through an intranet siteLinked through an intranet site

ASIC

ASICASIC

EEU IntranetEEU Intranet

ASICASIC

ASIC Scam Site?ASIC Scam Site?

ASIC

11,000 visitors 11,000 visitors between April 1 and April between April 1 and April

30 30

1200 asked for more information 1200 asked for more information

233 wished to invest 233 wished to invest

$4.02 million pledged to scam$4.02 million pledged to scam

ASIC

ASIC Scam Site - results?ASIC Scam Site - results?

ASIC

‘‘Self Help’ ResourcesSelf Help’ Resources

On-line consumer advice On-line consumer advice Due diligence searches Due diligence searches

– ““Look left and right before you click..”Look left and right before you click..”

ASIC

DetectionDetection

ASIC’s “ASIC’s “Web HoundWeb Hound” Project” Project

Automatically Automatically – identify “high risk” web sitesidentify “high risk” web sites

– assess & aggregate the riskassess & aggregate the risk

– analyze risk associated to mentioned analyze risk associated to mentioned

entitiesentities

– identify and refer high risk mattersidentify and refer high risk matters

ASIC

Public

Secure

InternetPublic

Search EnginesContent Gathering

Data Collection

Query Collect

RiskAssessment

Analyse Report

CorporateDBs

AIR GAP

ASIC

Sought after toolsSought after tools

Use of equipment for search Use of equipment for search warrantswarrants– Mirror ImagingMirror Imaging

Retention of ISP recordsRetention of ISP recordsMonitoring by ISPMonitoring by ISPRemoval of internet materialRemoval of internet materialRemoval if ISP servicesRemoval if ISP servicesNew offence for SPAMMINGNew offence for SPAMMING

ASIC

Electronic EnforcementElectronic EnforcementKeith InmanKeith Inman

October 2000October 2000