Chapter 3

CHAPTER 3

COMPUTER and INTERNET CRIME

VIGNETTE

Trading Scandal at Societe Generale

1.  Peter Gumble, European editor for Fortune Magazine, comments, "Kerviel is a stunning example of a trader breaking the rules, but he's by no means alone. One of the dirty little secrets of trading floors around the world is that every so often, somebody is caught concealing a position and is quickly-- and quitly--dismissed.... [This] might be shocking for people unfamiliar with the macho, high-risk, high-reward culture of most trading floors, but consider this: the only way banks can tell who will turn into a good trader and who won't is by giving every youngster it hires a chance to show his mettle. That means allowing even the most junior traders to take aggressive positions. This leeway is supposed to be matched by careful controls, but clearly they aren't foolproof." What is your reaction to this statement by Mr. Gumble?

     ANSWER : My reaction about Mr. Gumble's comment is that Kerviel is good of deleting and reentering unauthorized transactions without getting caught.

2. What explanation can there be for the failure of SocGen's internal control system to detect Kerviel's transactions while Eurax detected many suspicious transactions?

     ANSWER : The failure of SocGen's internal control system is their IT security is weak, they must verify all the data that individual traders entered into the system.

CASE 3: Whistle - Blower Divides IT Security Community

1. Do you think that Mike Lynn acted in a responsible manner? Why or Why not?

     ANSWER : Mike Lynn was acted acted in a responsible manner because he discovered that it was possible to create a network worm that could propagate itself as it as it attacked and took control of routers across the Internet.

2. Do you think that Cisco and ISS were right to pull the plug on Lynn's presentation at the Black Hat conference? Why or Why not?

     ANSWER : No, because Lynn was just presented his discovery about the network worm and to inform the IT security professionals and the public about the danger.

3. Outline a more reasonable apporach toward communicating the flaw in the Cisco routers that would have led to the problem being promptly addressed without stirring up animosity smong the parties involved.

     ANSWER : A more reasonable approach toward communicating the flaw in the Cisco routers that would have led to the problem being promptly addressed without stirring up animosity among the parties involved is that the flaw in the Internet operating system.