Chapter 3

 CHAPTER 3 - COMPUTER AND INTERNET CRIME (Case Study)

VIGNETTE

Trading Scandal at Society General

Questions to Consider:

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 quietly - 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 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

  

I agree about the statement of Mr. Peter Gumble, because the only way banks can tell who will turn into a good trader and who won’t by giving every youngster it hires a chance to show his mettle. That means allowing even the most junior traders to take aggressive positions. That this leeway is supposed to be matched by careful controls, but clearly they aren’t foolproof.

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

Answer

           For me, the failure of SocGen's internal control system is lack of security detection for some malicious industrial spy, they will take advantage to steal money from the organization. 

Whistle-Blower Divides IT Security Community

Discussion Questions and Answers:

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

    

Answer

   

Yes, Mike Lynn is a responsible because she did her best to prevent any problem not only in our company also or our country.  That’s why Lynn informed ISS and CISCO of his intentions.

2. Do you think that CISCO and ISS were right to pull the plug on Lynn's presentation at the black hat conference ? why and why not?

         

Answer

   

I think yes, because if they pull the plug on Lynn's presentation this will be the beginning of having a security and protection for stealing the internet of the CISCO routers.

3. Outline 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.