ASIC Australian Securities & Investments Commission Electronic Enforcement Keith Inman October 2000

ASIC Corporations Law watchdog “Promoting honesty and fairness in securities and futures markets and in company affairs.”

ASIC ASIC regulates: Companies Investment advisers Superannuation funds Managed investments Insurance agents and brokers Company auditors and liquidators Life and general insurance companies Australian Stock Exchange Ltd (ASX Ltd), Sydney Futures Exchange and other authorized markets Deposit-taking by banks, credit unions, building societies, friendly societies

ASIC Law enforcement agency 400+ investigative staff 400+ investigative staff criminal and civil actions criminal and civil actions

ASIC ASIC & Cyberspace Entry barriers to crime have dropped Entry barriers to crime have dropped –easy to use –cheap –access to a very large consumer base –anonymous

ASIC Old economy scams + New economy scams + New economy scams = Significant increase in volume = Significant increase in volume Trend?

ASIC E-Scams –Illegal Investment schemes IPOs without prospectus Free Stock offers High Yield Schemes Exotic Schemes –Market Manipulation (Pump & Dump) –Unlicensed advice (Financial Gurus) –Non-Disclosure of interests –Hawking Trading software Exaggerated claims Unlicensed advice

ASIC Spam Bulletin Board Postings

ASIC Independent Relay Servers

ASIC IP 1IP 2 Suspect 1 #1#2 Suspect 2 Spam Bulletin Board Postings ISPs

ASIC The Challenge? Trace the source Trace the source –Postings on BBs –SPAM s Understand the technology Understand the technology –Content Providers –ISPs –Telecommunication Carriers Gather & present evidence Gather & present evidence

ASIC Dog years !!! Dog years !!! –1 day = 1 month The Challenge?

ASIC What is ASIC doing? ASIC

Leverage Web technologies Internal Learning & Development Internal Learning & Development Consumer Education Consumer Education “Self Help” Resources “Self Help” Resources Detection Detection

ASIC Electronic Enforcement Unit (EEU) Small, national team Small, national team  “Centre of expertise” Dedicated resources Dedicated resources  Legal  Investigative  Technical

ASIC National volunteer network of 60 staff National volunteer network of 60 staff Specialized web tracing/forensic computing training Specialized web tracing/forensic computing training Linked through an intranet site Linked through an intranet site ASIC

EEU Intranet

ASIC ASIC Scam Site?

ASIC 11,000 visitors between April 1 and April 30 11,000 visitors between April 1 and April 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 ‘Self Help’ Resources On-line consumer advice On-line consumer advice Due diligence searches Due diligence searches –“Look left and right before you click..”

ASIC Detection ASIC’s “Web Hound” Project ASIC’s “Web Hound” Project Automatically Automatically –identify “high risk” web sites –assess & aggregate the risk –analyze risk associated to mentioned entities –identify and refer high risk matters

ASIC Public Secure Internet Public Search Engines Content Gathering Data Collection Query Collect Risk Assessment Analyse Report Corporate DBs AIR GAP

ASIC Sought after tools Use of equipment for search warrants Use of equipment for search warrants –Mirror Imaging Retention of ISP records Retention of ISP records Monitoring by ISP Monitoring by ISP Removal of internet material Removal of internet material Removal if ISP services Removal if ISP services New offence for SPAMMING New offence for SPAMMING

ASIC Electronic Enforcement Keith Inman October 2000