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South Korean police investigate £14.2m security bungle at Daewoo Securities - BBC

27 August 2002  |  3300 views  |  0 cash escaping

BBC News is reporting an investigation by South Korean police into a £14.2 million fraudulent share transaction at Daewoo Securities.

According to the BBC report, police are attempting to discover how a fraudster broke through firewalls at Daewoo Securities to sell five million shares in Internet network provider Delta Information and Communications.

The shares were not owned by Daewoo, which was then forced to settle the 25.9bn won (£14.2m; $21.7m) transaction, says the report.

While it is unclear how the hacker benefited from the break-in, although the manipulation of Delta's share price may have been the primary motivation according to South Korea's financial watchdog, Financial Supervisory Service (FSS).

The FSS has banned cash withdrawals from 39 customer accounts, including those of a Daewoo broker, who left for the Philippines on Friday, reports the BBC.

The fraudster is believed to have stolen the password for an account held by Hyundai Investment Trust Management.

The BBC says the Korean regulatory watchdog 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 is reported to have said.

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