Firms Look to Corporate Security Experts to Combat Fraud
A former Goldman Sachs executive dipped into the company’s data base and allegedly stole secrets, according to FierceCIO.com. Allegedly, the report states, the exec took propriety computer programs that the financial giant uses to make rapid trades in the financial markets. Although Goldman did notice a surge of data leaving its servers and his activities were recorded by the computer system, FierceCIO notes this is just another example of how data is not really safe, regardless of how many firewalls and trip wires put up to protect a firm’s systems.
The Goldman case may be symptomatic of a larger trend. Insider theft incidents surged last year, according to FierceCIO. The report adds this source of data theft was most prevalent in the financial services industry, where layoffs may have created scores of disgruntled employees with access to sensitive data.
KPMG’s 2009 E-crime Survey also concludes that amid the downturn employees may be more willing to steal data or sell insider knowledge, according to Computerworld. The survey found that 66% of respondents feel that out-of-work IT professionals would be tempted to join a criminal underground as a result of the economic meltdown and use their knowledge against their former companies.
Employees often have “super access” to sensitive company systems and know those systems’ weaknesses. Companies need to have strict procedures for locking such individuals out once they no longer work at their organizations, the survey said.
The KPMG survey also finds that fraud committed by managers, employees and customers tripled last year in comparison with 2007, which indicates that the recession will likely exacerbate those problems.
Identity Theft on the Rise
Security firm Tiversa says its research reveals a 32% jump in identity theft-related searches in the fall of 2008 as thieves continued to find new ways to extract sensitive information and commit fraud on unsuspecting victims, reports FierceCIO. The company said its data shows that the searches for sensitive information include keywords related to personal banking logins, passwords, tax returns, credit card, account numbers, credit reports and medical information.
A report released by the security tracking Identity Theft Resource Center also found there were 646 data breach incidents reported in 2008, a 47% increase over 2007 and an all-time record, adds Fierce CIO. The report notes the spike is partly a result of technological advances that have made data more mobile over time. In short, the wide use of USB drives, laptops and portable hard drives have all led to so-called “data on the move” breaches where data is physically lost or stolen.
Tackling Fraud
Now amid high profile fraud cases, experts say that companies will need to re-examine their financial controls, corporate governance, compliance and transparency policies. As these massive instances of fraud took place right under the noses of experienced investors and regulators, the Association of Certified Fraud Examiners (ACFE) argues corporate executives and management should now be tackling the issue of fraud in their own companies.
With credit scarce and jobs precarious, the ACFE says there’s little doubt we’re in a boom time for scams. “Companies are restructuring, revising their strategies, trying to preserve their interest, their cash, their asset position. And because of looking at their businesses, they’re starting to find more fraud,” says Hitesh Patel, Fraud-Investigation Partner at KPMG in London.
Facing the growing threat of fraud and its dire consequences, executive search firm, A.E. Feldman, reports that corporations are increasingly looking to corporate security experts to identify and help prevent white-collar crime. The recruiting firm is already addressing this growing need and is currently working with the industry’s leading fraud specialists.
Are you working in corporate security? If you want to grow your career or discuss your firm’s talent or security needs, contact A.E. Feldman’s President, Mitch Feldman, today.
