Cyber fraud a growing risk to Australia’s financial markets, report finds
Austrac, the federal government’s financial intelligence agency, says foreign crime syndicates are also manipulating markets and laundering money.
Australia’s multibillion-dollar financial markets are vulnerable to an increasing risk of cyber-enabled fraud, a new report has found.
Overseas-based crime syndicates are also exploiting Australia’s financial infrastructure to manipulate markets and launder money, the report by Austrac, the government’s financial intelligence agency, found.
Austrac said the risk of criminal exploitation of the nation’s securities and derivatives sector was “at the high end of medium”.
Austrac’s work relied on an analysis of 663 reports of suspicious activity from the corporate sector, made by 68 entities. About half the reports involved suspected fraud.
Austrac warned the shift to online trading had heightened the risk of cyber-enabled fraud, which was increasing in both “volume and the level of sophistication”. About half of all fraud reports involved cyber fraud, it said.
Such fraud could involve hacking an online trading account and using it to conduct trades or siphon off funds.
“In some cases this activity was enabled by fraudsters finding out the answers to the customer’s security questions by trawling through the customer’s social media,” the report found.
Cyber fraud could also involve hacking a business email to send fraudulent instructions to a financial institution to transfer client funds or close a trading position. Roughly one-fifth of the reports to Austrac involved cases of money laundering, and 13% related to insider trading.
Concerns about the financing of terrorism were low, at less than 1%. Only a “very small number” involved politically exposed persons.
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