ASIC wins fight against cyber breach with $77K recovered

Financial-Services/funds-management/hacking/

6 August 2015
| By Daniel Paperny |
image
image
expand image

Over $77,000 will be restrained by Australian Securities and Investments Commission (ASIC) following a joint operation with the Australian Federal Police (AFP) into the hacking of online accounts of retail investors, according to a ruling by the Supreme Court of NSW yesterday.

The operation, titled Operation Emerald, investigated an internet hacking, market manipulation and money laundering scheme involving a client account held overseas that traded through Morgan Stanley Australia Securities Limited.

ASIC Commissioner, Cathie Armour, said that ASIC were determined to combat the threat of cyber-crime and suspicious trading activity, particularly when Australian retail investors were compromised.

"ASIC has a world-class surveillance system to gather, match and analyse data to uncover misconduct, and its staff continue to monitor and detect suspicious trading activity and work with market participants to ensure account hacking is swiftly identified and stopped," she said.

ASIC's investigation discovered that the unauthorised trades were made by a Russian hacker who hacked into a number of retail client accounts held with Commonwealth Securities Limited, Etrade Australia and Australian Investment Exchange Limited.

The suspected hacker targeted 13 penny stocks listed on the Australian Securities Exchange and traded them in such a way that he created an artificially inflated price.

Consequently, the hacker traded out of the positions and collected the profits generated.

The illicit trades, which occurred between 18 August 2014 and 21 October last year, were detected by ASIC's surveillance team and immediate action was taken to prevent the profits from being distributed.

According to the Corporations Act 2001, such breaches and forms of market manipulation can carry penalties of up to 10 years in gaol.

AFP Proceeds of Crime Litigation team manager, David Gray, said the result of this joint investigation should serve as a strong reminder to those who wish to conduct illegal money laundering activities in Australia.

"Despite efforts by criminals to evade detection, the AFP and its law enforcement partners remain committed to taking the profits out of crime and will take every opportunity to stop criminals from reinvesting these profits to fund other criminal ventures," he said.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

So we are now underwriting criminal scams?...

1 month 3 weeks ago

Glad to see the back of you Steve. You made financial more expensive, not more affordable as you claim, and presided ...

2 months ago

Completely agree Peter. The definition of 'significant change is circumstances relevant to the scope of the advice' is s...

4 months ago

Entireti has unveiled the new name for the AMP financial advice businesses that it acquired last year....

4 weeks ago

A Sydney financial adviser has been permanently banned from providing any financial services, with the regulator deriding his “lack of integrity, trustworthiness and prof...

2 weeks 6 days ago

Minister for Financial Services, Stephen Jones, has provided further information about the second tranche of the Delivering Better Financial Outcomes (DBFO) reforms....

1 week 5 days ago

TOP PERFORMING FUNDS