02 March 2007

Insider Threat: Reputation is #1 Concern...

A recent EIU Survey on Business Resilience has some reinforcing stats, yet nothing so shocking.

Forty-seven percent of the risk managers questioned for a new Economist Intelligence Unit survey into business resilience said that unplanned downtime of information technology systems lasting 24 hours or more could jeopardise the survival of their entire business.

The severity of the threat from disruption to IT systems is one of several factors prompting companies to increase the attention they devote to risks associated with their operations.

75 percent say that operational risk management is an increased focus as their reputation remains their highest concern overall. And today, UBS, Bear Stearns, Morgan Stanley and others are cooperating on an SEC investigation into insider trading:

Employees of some of Wall Street's top banks were among more than a dozen people charged on Thursday in what authorities called one of the most pervasive insider trading rings since the 1980s, accused of using leaked information and even blackmail to make millions of dollars.

U.S. prosecutors filed criminal charges against 13 people and the Securities and Exchange Commission filed civil charges against 11 in an investigation that has spanned more than a year and is ongoing. One person named in the SEC's complaint does not face criminal charges.

Authorities said some of those of those accused in the cases used clandestine meetings, disposable cell phones, secret codes and cash kickbacks to elude detection and avoid suspicion.

It was "one of the most pervasive Wall Street insider trading rings since the days of Ivan Boesky and Dennis Levine," Linda Thomsen, director of enforcement with the SEC, said at a joint news conference with the U.S. Attorney and the FBI.

Electronic Discovery strategy today focuses on providing the least amount of data required to satisfy legal requirements. Litigators are careful asking for data as they will no doubt be required to reciprocate with the same amount of actionable data. However, amendments to the Federal Rules of Civil Procedure (FRCP) that went into effect on December 1 require that organizations be prepared to locate and produce information in electronic format- including emails, files, and database data-during legal litigation.

The eDiscovery war has started and these firms will be delivering Terabytes of electronic information to satisfy the ongoing process for criminal and civil litigation. These operational and reputational challenges would stress any organization who is not prepared for such demanding and extensive requests for electronic records. Expensive too, at an average of $1,800. per gigabyte.

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