Generally defined in law as an intentional misrepresentation of
facts made by one person to another person, knowing that such misrepresentation
is false but will induce the other person “to act”—resulting in injury or
damage to him or her.
Fraud may include an omission of facts or an intended
failure to state all the facts. Knowledge of the latter would have been needed
to make the other statements nonmisleading. In cyber terms, spam is often sent in an effort to
defraud another person by getting him or her to purchase something he or she
has no intention of purchasing.
Recently in the United States, the Sarbanes-Oxley Act (SOA)
was passed as a reaction to the accounting misdeeds of companies such as
WorldCom and Enron. With the vast amounts of personal information stored on
company computers, fraud opportunities abound for cyber criminals. A major
problem prompting the passage of this Act was that companies storing huge
amounts of information have tended to give little thought to what is being
stored, or how securely it is being shared. Consequently, occasional
occurrences of fraud or alterations of data by crackers have often gone
Experts have argued that rather than spend large amounts of
money to store data in accordance with the Act, companies should allocate some
money to determine exactly what kinds of information need to be stored and for
how long. Many companies have policies, for example, dictating that data be
stored for periods lasting from six to nine months, but this timeline may not
be realistic. Such confusion over this important information storage issue may
be a primary reason that the Sarbanes-Oxley Act deadline for companies based in
European countries has been pushed back another year. Originally, the
controversial Section 404 of the SOA outlined the requirement for companies to
archive information by July 15, 2005.
See Also: Accountability;
lectlaw.com. The ’Lectric Law Library’s Lexicon On Fraud. [Online, 2004.]
’Lectric Law Library Website. http://www.lectlaw.com/def/f079.htm; Sturgeon, W.
CNETNews.com. Hidden Fraud Risk in Sarbanes-Oxley? [Online, March 7, 2005.]
CNET Networks, Inc. Website.