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To: Jeffrey S. Mitchell who wrote (1602)	5/22/2001 11:03:04 PM
From: Jeffrey S. Mitchell	Respond to of 12465

Re: 5/9/01 - NewsFactor: Finance Fraud Spreads on Internet Finance Fraud Spreads on Internet By Ross Hawkins Special to NewsFactor Network May 9, 2001 The identities of financial Web sites are increasingly being hijacked by Internet fraudsters, and the authorities are struggling to fend off the threat. Worryingly for investors, con men have latched on to the financial wire services and are using counterfeit Web pages to mount elaborate scams to ramp share prices. Last month a group of hackers created false sites, purported to be produced by Bloomberg and clearing bank Euroclear, to help manipulate a U.S. penny stock. The group behind the scam used the sites to persuade a Californian software operation they could provide $10 million of investment in return for an equity stake in the company. When the victims announced the investment through the Securities & Exchange Commission, the company's stock jumped and the fraudsters tried to borrow against the value of their inflated shares. More Doubt The scheme cast fresh doubt on the quality of investment information posted on the Internet. Last year, 23-year-old college student Mark Jakob was charged with 11 counts of fraud after issuing a fake press release on the Net falsely announcing an accounting scandal at technology company Emulex Corp. The phony release was distributed by several major newswires, and Jakob is accused of making US$240,000 from the scam. Security experts fear hoax Web sites are surging in popularity and say they pose grave risks to both customers' cash and corporate credibility. They say fraudsters are abandoning difficult attempts to hack into Web sites in favor of the far simpler ploy of replicating them or conning them into carrying false information. Jon Merrett, assistant director of the Commercial Crime Bureau of the International Chamber of Commerce, investigated the Bloomberg incident. "The way the Internet is set up assists this type of fraud," he said. "We see a lot of faked institutions online." 'Easy To Do' Bob Fletcher, director of cyber risk-management at Risk Advisory Group, said: "This is so easy to do and I wouldn't be surprised to see a few more." He said that popular Internet search engines would often confuse fake Web sites with the real thing and direct customers towards the sham sites. Now companies are investing in staff and consultants to scour the Web for hoax pages. Bloomberg and Euroclear confirmed they had staff checking for lookalike pages. A Bloomberg spokeswoman said: "We're very diligent when we find things like this. But people should beware if the page they are directed to does not link back to our main site." Fears about Internet brand-stealing have sparked a minor industry in scanning the Internet. Cyveillance, a Net security firm that has recently opened in the UK, is helping a number of financial Web sites to ensure that their identities are not stolen. Its software automates the search for stolen information and logos, identifying graphics as well as text taken from corporate Web sites. Rogue Sites Peter Bond, a Cyveillance director, said its services were also popular among football clubs wanting to check for rogue sites selling unlicensed merchandise. "It's a considerable issue," Bond said. "The amount of people who know how to do things like this is increasing. We've found quite a few sites that appear to be created by one of our clients but it isn't a client site at all." Many copied sites were merely ploys to collect customer credit-card numbers, he added. Where Web sites are not copied to add authority to false information, they still face the threat of their own information being stolen, said Bond. "We find hundreds of sites where information has been taken without authorization." While it is almost impossible to make sure illegitimate copies of sites do not surface on the Net, companies can do more to protect their brands, according to PricewaterhouseCoopers technology-risk specialist Michael Warren. Register Misspellings He said PwC customers are advised to register not just domain names incorporating their company identity, but also misspellings of the name. Companies should also be sure to protect their systems to stop hackers placing links to false sites on their Web pages. While replicated Web sites have only recently hit the news, Warren said they had long been a problem: "It's been going on for quite some time in different guises. It's potentially pretty damaging for customers and investors, but it's more damaging for companies that are being ripped off." The FBI has yet to track down those behind the Bloomberg scam, and while fake sites are frequently shut down their creators are rarely discovered and prosecuted. With such a small risk of getting caught, expensively-built brands seem set to continue to be as valuable to fraudsters as they are to their owners. © 2001 Sunday Business, London i/a/w ScreamingMedia, Inc. All rights reserved. © 2001 NewsFactor Network. All rights reserved. newsfactor.com