THE BLOG
08/15/2012 01:10 pm ET Updated Oct 15, 2012

The Threat From Within

As long as there have been trades, there have been trade secrets. From Coca-Cola's secret formula to Google's search algorithm, there are reasons why proprietary and highly confidential information has always been safeguarded.

Late last week, my office's Cybercrime and Identity Theft Bureau brought state charges against a former Goldman Sachs computer programmer for accessing and duplicating the computer source code for the financial institution's high-frequency trading system. The complex algorithm that the defendant is charged with taking allows a significant volume of trades in securities, commodities, and options to be made based on trading decisions executed in fractions of a second.

As theft by "insiders" at companies is becoming ever more pervasive and the theft of individual New Yorkers' identities is becoming our fastest-growing crime, we cannot allow cybercriminals to evade criminal responsibility.

Recent successful prosecutions by my office in this area include the conviction at trial last week of four people, including an accounts payable clerk at Columbia University, who stole more than $5.7 million from the institution by electronically transferring the funds into accounts they controlled. This followed the conviction of a Sam Yin, a disgruntled former network engineer for Gucci America, who shut down the luxury goods retailer's email system for nearly 24 hours after being fired, temporarily blocking workers from accessing documents and permanently deleting files, resulting in a loss of more than $200,000 to the company. In December, 55 individuals were indicted as part of a conspiracy that used workers at businesses throughout New York -- including an auto dealership, a real estate management company, a charity, and a bank -- to steal personal financial information from thousands of unsuspecting victims.

In order to build complex investigations into large-scale financial fraud and rings of cyber thieves, my office relies upon the expertise of our Cybercrime and Identity Theft Bureau, which includes more than 100 specially-trained attorneys and analysts, and a cybercrime lab known as the "High Technology Analysis Unit." Thanks to a generous $4.2 million allocation from the New York City Council that I announced yesterday with Council Speaker Christine Quinn, this lab will now be able to keep pace with the growing volume of electronic evidence that has become part of nearly every case my office prosecutes.

This lab will not be lacking for work: ID theft has been the top consumer complaint in the country for the past 12 years, and my office investigates approximately 200 to 300 new cases each month. In addition to investigating cybercrimes and financial fraud, the lab also conducts cell site analysis and forensic analysis of computers, phones, and other electronic storage devices for street crimes, including from the criminal who surreptitiously takes photos up women's skirts on the subway, to the murderer whose whereabouts can be tracked using cell phone signals, to the gang member broadcasting his or her affiliation on social media.

ID theft happens everywhere, everyday, in every type of company. Confidential data and trade secrets are particularly vulnerable to hacking, theft, and removal by insiders. In order for this to be avoided, companies need to review what protections and safeguards they have in place to protect this data from theft, and carefully vet employees who have access to it. Because, as we have seen, the threat from insiders is often greater than the threat from outsiders.