South Korea probes online dealing fraud
September 2002
South Korean police are investigating a fraud which saw hackers break through a bank's security system to sell 5 million shares they did not own.Police said they were attempting to discover how a fraudster broke through firewalls at Daewoo Securities to sell the shares in internet network provider Delta Information and Communications.
The hacker then disappeared, leaving Daewoo to settle the transaction. A Daewoo broker, who left for the Philippines on Friday, is believed to have been involved in the scam.
The fraudster is believed to have stolen the password for an account held by Hyundai Investment Trust Management to undertake the 25.9bn won (£14.2m; $21.7m) scam.
While it is yet unclear how the hacker benefited from the break-in, the manipulation of Delta's share price may have been involved, South Korea's finance watchdog, Financial Supervisory Service (FSS), said.
"We are deeply concerned over the cyber crime," the FSS added.
The FSS itself told heads of brokerages at a meeting on Sunday to ensure their systems were secure.
"Financial companies should bolster their internal control systems promptly and after that we will examine them and punish those whose systems fail to come up to scratch," the FSS said.
The stock fraud case is a "big warning" for local brokerages, LG Investment and Securities analyst Choi Yong-Ho said.
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