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Two U.S. Securities and Exchange Commission employees are under investigation by federal criminal authorities for allegedly using insider information to trade stocks, a source familiar with the matter said on Thursday. A report by the SEC's internal watchdog alleges that the two SEC lawyers traded in stock of a large financial services company despite being told by another SEC employee of ongoing investigations of that company, CBS News reported. The SEC inspector general report said one SEC attorney under investigation works in the Office of the SEC's Chief Counsel and has access to a tremendous amount of nonpublic information, CBS News said. An SEC spokesman said: "We take seriously even the suggestion that any SEC employee would engage in insider trading. We note that the inspector general report neither accuses any SEC employee of insider trading nor concludes that any such conduct took place." Calls to the SEC's inspector general and Federal Bureau of Investigation were not immediately returned.

A TV investigation has revealed that secondhand BlackBerries on Nigerian markets are priced according to the data held on them, not the age or the model of a phone. Jon Godfrey, director of Sims LifeCycle Services, who is advising on a TV investigation into the trade due to screen later this year, said that BlackBerries sell for between $25 to $65 on Lagos markets. Details of the trade come from an agent in Nigeria unaffiliated to Sims' technology recycling business. Godfrey explained that the smart phones offered for sale come from the US, continental Europe and the UK. "It's unclear as yet whether the phones are either sold, thrown away, lost or stolen," Godfrey explained. Other type of smartphone are also of potential interest to data thieves, but it is the trade in BlackBerries that seems to be the most active. Data retrieved from smartphones is itraded by crooks in Nigeria. BlackBerries include technology to remotely wipe devices and come with built-in encryption. But this encryption is often left switched off because it is considered an inconvenience.

A former Goldman Sachs computer programer accused of stealing secret trading codes from the investment bank was being held in federal custody on Monday, pending the posting of $750,000 bail. Sergey Aleynikov, 39, was ordered by U.S. Magistrate Kevin Nathaniel Fox in Manhattan on Saturday to post a $750,000 personal recognizance bond to be secured by three financially responsible people, according to court documents. The bond also was to include $75,000 in cash, and Aleynikov was ordered to surrender his passport and not to access the computer data at issue in the case. A preliminary hearing in his case was scheduled for August 3. Aleynikov, a Russian immigrant living in New Jersey, was arrested on Friday night by FBI agents as he got off a flight at Newark Liberty International Airport, according to court documents. He is accused of "theft of trade secrets" related to computer codes used for sophisticated automated stock and commodities trading at an unspecified, New York-based financial institution, according to the court affidavit filed by FBI special agent Michael McSwain. Sources familiar with the situation have told Reuters columnist Matthew Goldstein that the financial institution is Goldman Sachs. A Goldman representative declined to comment on Monday. A lawyer for Aleynikov, Sabrina Shroff, also declined to comment.

"The United States House of Representatives took a major step this week toward enacting a national data breach notification law. H.R. 2221, the Data Accountability and Trust Act (DATA), cleared the House with a voice vote. In its current form, DATA requires businesses to notify customers and the Federal Trade Commission (FTC) if sensitive information has been exposed to a security breach. If the U.S. Senate can reconcile its own approach to data breach notification legislation with DATA, a new federal standard will emerge. If signed into law by President Barack Obama, a federal data breach ¬law would pre-empt the jumbled mass of dozens of state laws. "You'd be better served by federal legislation if the federal legislation has teeth and doesn't pre-empt the state's law," said California state senator Joe Simitian, speaking to executive editor Scot Petersen in September. "If there was a meaningful standard at the national level, I think many states would be happy to accept it." Aside from the data breach notification required by the HITECH Act, DATA would put into place the first national law of its kind. H.R. 2221 was sponsored by House Subcommittee Chair Rep. Bobby L. Rush of Illinois. The bill specifically states that: "Any person engaged in interstate commerce that owns or possesses data in electronic form containing personal information shall, following the discovery of a breach of security of the system maintained by such person that contains such data -- 1. notify each individual who is a citizen or resident of the United States whose personal information was acquired by an unauthorized person as a result of such a breach of security; and 2. notify the Federal Trade Commission."

"Nearly every practicing doctor in the United States is being warned that their identities might have been stolen when the laptop of an employee of an insurance trade group was snagged from a car in Chicago. The laptop contained business and personal information such as Social Security numbers, addresses and certain identification numbers on the laptop of an employee from the Chicago-based Blue Cross and Blue Shield Association, a trade group for the nation's Blue Cross health insurance plans. The association confirmed that an employee "broke protocol and transferred to a personal laptop" information that was stolen in late August. No patient information was on the database, and so far, no doctor has reported a security breach. However, nearly 20 percent of the doctors listed in the database have their Social Security numbers as their medical-care provider identification, putting these health professionals at risk for identity theft, according to an article in the Chicago Tribune."

The Nature of the Problem Identity theft has been referred to by some as the crime of the new millennium. It can be accomplished anonymously, easily, with a variety of means, and the impact upon the victim can be devastating. Identity theft is simply the theft of identity information such as a name, date of birth, Social Security number (SSN), or a credit card number. The mundane activities of a typical consumer during the course of a regular day may provide tremendous opportunities for an identity thief: purchasing gasoline, meals, clothes, or tickets to an athletic event; renting a car, a video, or home-improvement tools; purchasing gifts or trading stock on-line; receiving mail; or taking out the garbage or recycling. Any activity in which identity information is shared or made available to others creates an opportunity for identity theft. It is estimated that identity theft has become the fastest-growing financial crime in America and perhaps the fastest-growing crime of any kind in our society. Identity Theft: Is There Another You?: Joint hearing before the House Subcomms. on Telecommunications, Trade and Consumer Protection, and on Finance and Hazardous Materials, of the Comm. on Commerce, 106th Cong. 16 (1999) (testimony of Rep. John B. Shadegg). The illegal use of identity information has increased exponentially in recent years. In fiscal year 1999 alone, the Social Security Administration (SSA) Office of Inspector General (OIG) Fraud Hotline received approximately 62,000 allegations involving SSN misuse. The widespread use of SSNs as identifiers has reduced their security and increased the likelihood that they will be the object of identity theft. The expansion and popularity of the Internet to effect commercial transactions has increased the opportunities to commit crimes involving identity theft. The expansion and popularity of the Internet to post official information for the benefit of citizens and customers has also increased opportunities to obtain

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To help parents better understand their childrens' online privacy rights, the Federal Trade Commission has developed a new article, Protecting Kids' Privacy. The article is posted at OnGuardOnline.gov, a Web site sponsored by the federal government and the technology industry to help users stay on guard against Internet fraud, secure their computers, and protect their personal information. Parents can learn what Web sites must do to protect the privacy of kids younger than 13 under the Children's Online Privacy Protection Act (COPPA). For example, with very few exceptions, sites must get parents' permission if they want to collect or share their kids' personal information. Parents also will find tips for talking to their kids about online privacy, knowing what their kids are doing online, reporting a Web site that may be violating COPPA, and more. To learn more about online privacy for kids, view this article on OnGuardOnline.gov at www.OnGuardOnline.gov/topics/kids-privacy.aspx or view it as an FTC Facts for Consumers publication at http://www.ftc.gov/bcp/edu/pubs/consumer/tech/tec08.shtm. The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC's online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 1,500 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC's Web site provides free information on a variety of consumer topics.

Mary Kay Hoal tried everything she could to keep her daughter off of MySpace. She put password locks on the computer and blocked the site. Still, her daughter found ways to log on. Hoal's concerns stemmed from statistics that showed 29,000 registered sex offenders were on MySpace, one out of every five kids are sexually solicited online, and nine out of ten children are exposed to pornography online. When she looked for alternative safe sites for kids, she found none, so she decided to do something about it. Story continues below ↓advertisement | your ad here Click Here! The result is www.yoursphere.com, the only social networking site for kids and teens that's backed by the Federal Trade Commission through the site's Privacy Vaults approval. The site's Chief Technology officer worked at the California Department of Justice tracking anonymous online sex offenders, as well as the Megan's Law database. Moreover, it requires verified parental consent for a minor to join. Other features include: -- Requires verifiable parental consent to join -- Confirms the identity of the parent providing consent -- Confirms that the parent or guardian providing consent is not a registered sex offender -- Is exclusively for kids and teens through age 18. -- Exceeds COPPA (Children's Online Privacy Protection Act) and Federal Trade Commission (FTC) guidelines for protecting kids online through our approval by Privacy Vaults Inc. -- Whose policy is "no creepers allowed" -- lurkers are removed and banned. -- No fake profiles. (No one is anonymous on Yoursphere.com) "The bottom line is that we're the only place in the online world that that has taken extraordinary measures to help ensure the safety of its members and meets or exceeds standards set by the government," Hoal said. "Our opinion is that if it's a behavior that is illegal, immoral or unacceptable offline, then it's unacceptable online." About Mary Kay Hoal After researching the disturbing la

Some consumers say they like the way Internet retailers will suggest new purchases to them based on what they've bought previously. Others feel creeped out when a banner ad seems to know a bit too much about their Web surfing habits. It's called behavioral advertising, and it's central to the business success of all manner of Internet commerce, from bookstores to newspapers. The practice needs regulation, says Rep. Rick Boucher , the Virginia Democrat who chairs the House Energy and Commerce Subcommittee on Communications, Technology and the Internet. Boucher says legislation to protect consumer privacy online will spur people to surf more. But Internet advertising companies are not happy about regulation, especially because Boucher's plan would require, in some cases, that consumers agree in advance before their surfing habits could be tracked. Such an approach "would really be a sea change in the U.S. regulatory framework," says Mike Zaneis, vice president for public policy at the Interactive Advertising Bureau. Virtually all consumer protection laws, he says, permit people to opt out of solicitation, for instance, with a "do not call" registry. For the Internet, Congress has done almost nothing. "To suddenly move toward a draconian opt-in standard," he says, "would really be damaging not just to businesses but consumers." Zaneis, whose group includes such news heavyweights as the New York Times Co. and Conde Nast Publications, says now is not the time to upend Internet companies' business models, right when the economy is in the tank and print advertising is drying up. He argues further that new Web browsers make the issue moot by giving consumers the ability to easily block the electronic "cookies" that track their online movements. The issue promises to be a lobbying extravaganza. Last year, when the Federal Trade Commission (FTC) was developing self-regulatory guidelines for Web companies engaging in behavioral advertising, it

Physician groups press FTC for exemption from Red Flag Rules With a May 1 deadline for compliance looming, the American Medical Association (AMA) has asked the Federal Trade Commission (FTC) to suspend the application of the Red Flag Rules to physicians and publish a new rule so that physicians have an opportunity to provide comments. In a March 9 letter to the FTC, AMA Executive Vice President Michael D. Maves wrote that the AMA "strongly believes that the FTC did not provide physicians with an opportunity to review and comment on this Rule." Controversy. Under the Red Flag Rules, which were finalized in October 2007 under the Fair and Accurate Credit Transactions Act (FACTA), financial institutions and creditors must develop and implement written identity theft prevention programs. FACTA provides a broad definition of "creditor" as "any entity that regularly extends, renews or continues credit." The FTC has interpreted this definition to include health care providers and physicians. The AMA and several other medical trade associations have taken the position that physicians were not intended to be subject to the Red Flag Rules, but the FTC has held firm in its interpretation, in spite of the objections. In a Feb. 4 letter to the AMA, the FTC reiterated its position that "the plain language and purpose of the Rule dictate that health care professionals are covered by the Rule when they regularly defer payment for goods or services." The FTC also has taken the position that application of the Red Flag Rules to physicians will reduce the incidence of medical identity theft and will not impose a heavy burden on health care professionals. Rulemaking process. In addition to its claim that health care providers should not be classified as creditors, the AMA also has argued that the physician community was not informed that it would be subject to the Red Flag Rules.

The House Energy and Commerce Committee is slated to vote Wednesday on legislation that would require strong security policies from firms that collect and store individuals' sensitive information and provide for nationwide notification in the event of a data breach. The bill was sponsored by House Energy and Commerce Commerce, Trade, and Consumer Protection Subcommittee Chairman Bobby Rush, D-Ill., and was tweaked to win his panel's approval in June, but more revisions are expected.

The House Energy and Commerce Committee is slated to vote Wednesday on legislation that would require strong security policies from firms that collect and store individuals' sensitive information and provide for nationwide notification in the event of a data breach. The bill was sponsored by House Energy and Commerce Commerce, Trade, and Consumer Protection Subcommittee Chairman Bobby Rush, D-Ill., and was tweaked to win his panel's approval in June, but more revisions are expected.

Until now, lawsuits seeking to recover significant damages based on the loss of, or unauthorized access to, sensitive personal information have not been especially successful for plaintiffs. Most companies suffering data breaches have escaped by offering affected consumers inexpensive credit monitoring services. But two recent cases show plaintiffs a way to expose many previously safe companies to substantial claims for damages. Any company that thinks there are no risks in employing less than best practices for data privacy and security needs a wake up call. The headlines are all too familiar. Some well known consumer services company (or less known wholesale data processor) announces that millions of individual records containing names, Social Security numbers, account numbers and other sensitive information were left in a dumpster, saved to a stolen, unencrypted laptop, or stored on a misplaced USB drive or backup tape. The press is terrible, the company's stock takes a temporary plunge, and sometimes the Federal Trade Commission enters into a consent decree where the company promises to never do it again. But when affected individuals or groups of consumers tried to sue for damages, they seldom recover significant amounts. These cases have not often succeeded because the plaintiffs have been unable to prove actual pecuniary losses resulting from the security breach. Sure, if identify theft occurs the affected individuals can suffer significant emotional trauma, loss of time, etc. But Courts have been unwilling to award damages for anxiety, fear, and other emotional harm that can result from a data breach, for the risk of future identify theft, or for actual identity theft when the plaintiff could not prove that the theft occurred as a direct result of a data breach at a particular source. Most companies facing claims based on data breaches have been able to settle cheaply by offering to provide credit monitoring services, which most consumers do not use, resu

Beware of web sites offering free money Iain Thomson in San Francisco vnunet.com, 04 Mar 2009 The Federal Trade Commission (FTC) is warning of a rash of online scams offering payouts under the economic stimulus plan passed by Congress. Businesses and individuals are being targeted by the scammers using web sites and emails, the organisation warned. Recipients are typically offered 'grants' from the government, and must either surrender bank details to get the funds or make a small payment. Advertisement"Web sites may advertise that they can help you get money from the stimulus fund. Many use deceptive names or images of president Obama and vice president Biden to suggest that they are legitimate. They are not," said Eileen Harrington, acting director of the FTC's Bureau of Consumer Protection. "Don't fall for it. If you do, you'll get scammed." Several variants have also been discovered that use malware to steal important data. These include pages that purport to offer links to sites that show how to get the federal funds. The pages are loaded with malware that can penetrate an improperly patched browser. "Consumers who may already have fallen for these scams should carefully check their credit card bills for unauthorised charges, and report the scam to the FTC," said Harrington.

Anatomy of a Data Breach Investigation: Alain Sheer, FTC Attorney February 17, 2009 The Heartland Payment Systems data breach is on everyone's mind, and the case is in the hands now of the Federal Trade Commission (FTC) if it chooses to investigate. While the FTC will neither confirm nor deny a Heartland investigation, staff attorney Alain Sheer does offer his insight on: How the FTC investigates data breaches like Heartland's; The timeline and milestones of such an investigation; Details of the CardSystems data breach - which closely resembles Heartland's.

The SEC will charge Angelo Mozilo, former chairman and CEO of Countrywide Financial, with insider trading, according to people familiar with the situation. The SEC will also charge the company's former chief operating officer, David Sambol, and former financial chief, Eric Sieracki, with securities fraud for failing to disclose the firm's relaxed lending standards in its 2006 annual report. The charges, which are expected to be announced by the SEC later today, will not be accompanied by any criminal indictments.

Another example of misuse of company data for personal gain.

Privacy is a central element of the FTC's consumer protection mission. In recent years, advances in computer technology have made it possible for detailed information about people to be compiled and shared more easily and cheaply than ever. That has produced many benefits for society as a whole and individual consumers. For example, it is easier for law enforcement to track down criminals, for banks to prevent fraud, and for consumers to learn about new products and services, allowing them to make better-informed purchasing decisions. At the same time, as personal information becomes more accessible, each of us - companies, associations, government agencies, and consumers - must take precautions to protect against the misuse of our information. The Federal Trade Commission is educating consumers and businesses about the importance of personal information privacy, including the security of personal information. Under the FTC Act, the Commission guards against unfairness and deception by enforcing companies' privacy promises about how they collect, use and secure consumers' personal information. Under the Gramm-Leach-Bliley Act, the Commission has implemented rules concerning financial privacy notices and the administrative, technical and physical safeguarding of personal information, and it aggressively enforces against pretexting. The Commission also protects consumer privacy under the Fair Credit Reporting Act and the Children's Online Privacy Protection Act.

"Consumers are often oblivious to the fact that some businesses share a great deal of their personal information with other businesses who deliver targeted behavioral advertising, says Anzen analysts Megan Brister and Jordan Prokopy. In an e-mail interview with IT Business Edge editor Lora Bentley, Brister and Prokopy say most consumers are just not aware of the business practices of companies that use personal information for profit. The Federal Trade Commission recently held meetings with consumer and privacy advocates, business and government leaders to discuss privacy, regulatory, and business issues of online behavioral advertising. It plans plan to ramp up efforts to protect consumers and possibly push for tougher legislation to protect consumers. One issue, Brister and Prokopy say, is the lack of transparency by companies that engage in behavioral advertising. These companies have been slow to adopt clear data-management policies and even when they do have policies, they are often written in language that is difficult to understand. Fortunately for consumers, some type of regulation appears to be on the way. The FTC appears eager to penalize businesses who lack transparency regardless of whether the consumer actually experienced any real negative effects as a result, Brister and Prokopy say."

"Lora Bentley spoke with Anzen analysts Megan Brister and Jordan Prokopy via e-mail regarding behavioral advertising - what companies are doing, what regulators want to do and what we, as advertising consumers, need to know. With their coworker Miyo Yamashita, the analysts recently wrote a guest opinion for IT Business Edge. Bentley: Why are so many concerned about privacy when it comes to behavioral advertising? What is it about the Internet that convinces consumers that information they share there is not being used? Brister and Prokopy: Most concerns stem from the lack of transparency around data disclosure practices. While consumers may value a Web site's product and service offerings, they are generally unaware that businesses share their information with an extensive group of other businesses in order to deliver targeted advertising. This group includes news Web sites, advertising networks, profiling services, and Web analytics providers, to name a few. As Pamela Jones Harbour, a Commissioner at the Federal Trade Commission (FTC), discussed at the FTC Roundtable earlier this week, there is an asymmetry between consumer perceptions and business realities. Once consumers are informed of businesses' data handling practices, they will want to have more control over how businesses manage their information. As we discuss in our article, some businesses engaged in online behavioral advertising have been slow to adopt transparent consumer data management policies. This is a concern particularly for vulnerable groups, such as minors or non-English speaking consumers, because they may not understand legally written policies. Consumer advocacy groups argue that without knowledge and control over the collection, use, and disclosure of data, Web sites may misuse or expose sensitive data about consumers' health, lifestyles and finances."

"The Federal Trade Commission will host a series of day-long public roundtable discussions to explore the privacy challenges posed by the vast array of 21st century technology and business practices that collect and use consumer data. Such practices include social networking, cloud computing, online behavioral advertising, mobile marketing, and the collection and use of information by retailers, data brokers, third-party applications, and other diverse businesses. The goal of the roundtables is to determine how best to protect consumer privacy while supporting beneficial uses of the information and technological innovation."

"With a lot of prodding from the Federal Trade Commission, the Internet advertising industry has committed to telling Web site users about how they collect and use data to customize the ads they display. And it has agreed to find a more prominent and clear way to do this than the cryptic privacy policies you can find if you click a tiny link at the bottom of many Web pages. But how do you communicate something very complex in a way that is clear but doesn't bog down people who just want to check the latest sports scores?"