[ISN] South Korea probes online dealing fraud

From: InfoSec News (isnat_private)
Date: Wed Aug 28 2002 - 02:04:22 PDT

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    http://news.bbc.co.uk/2/hi/business/2217584.stm
    
    26 August, 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.
    
    Key suspect
    
    Police are now tracking the account of the Daewoo broker.
    
    The FSS has banned cash withdrawals from 39 customer accounts in an
    effort to win time for the police investigation.
    
    But the moves have failed to calm investor nerves over online trading
    which has soared in recent years.
    
    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.
    
    Daewoo shares fell 5.9% to 6,600 won on Monday.
    
    Delta stock plunged 12% to 3,890 won.
    
    
    
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