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Article
Publication date: 3 March 2020

Luisa Mendonça and Alan De Genaro

The purpose of this paper is to analyze a data set from a brokerage firm to find possible spoofing cases in ten stocks from the Ibovespa index. The studies proposed concerned the…

Abstract

Purpose

The purpose of this paper is to analyze a data set from a brokerage firm to find possible spoofing cases in ten stocks from the Ibovespa index. The studies proposed concerned the parameters used in the search for the practice, the frequency of occurrences during the negotiation period, the impact on the price caused by the size of the spoofing order and the correlation between the stock's liquidity and the number of occurrences.

Design/methodology/approach

By using intraday orders flows, the authors are able to reassemble the order book and perform an analysis of potential market manipulation.

Findings

The authors found six possible cases, all of them happened in the beginning or end of the negotiation period, confirming that there is a window of opportunity for the practice when there is greater uncertainty related to the stock's price. Moreover, they found that in the less liquid stocks, it was necessary to place greater spoofing orders aiming to narrow the wider spread.

Practical implications

A methodology for spoofing detection that can be replicated by brokerage firms and other researchers was developed.

Social implications

The study contributes to the literature of capital market regulation by suggesting best practices for regulators and self-regulatory entities to avoid a predatory market practice.

Originality/value

The authors present an algorithm and parameters for detecting spoofing; other papers are not practical orientated.

Details

Journal of Financial Regulation and Compliance, vol. 28 no. 3
Type: Research Article
ISSN: 1358-1988

Keywords

Article
Publication date: 18 June 2020

Viktoria Dalko, Bryane Michael and Michael Wang

This paper aims to show that market power exists in financial markets and analyze how spoofing is used by a high-frequency trader to build market power by taking advantage of both…

Abstract

Purpose

This paper aims to show that market power exists in financial markets and analyze how spoofing is used by a high-frequency trader to build market power by taking advantage of both behavioral weaknesses of individual investors and microstructural loopholes of trading venues.

Design/methodology/approach

After showing that market power exists in the financial market, this paper centers around the question of how market power is constructed in the financial market. To sharpen the answer to the question, the paper compares the conditions needed for market power construction in the financial market with those needed in the goods market. The paper selects spoofing, the frequently used order-based tactic in high-frequency trading strategies, to analyze in detail how spoof orders can ignite herding with market power building as the essence. The Flash Crash that occurred in the New York Stock Exchange on May 6, 2010 provides an excellent case of market power construction exhibited in spoofing.

Findings

The behavioral mechanism of market power construction in the case of spoofing is perception alignment. It becomes effective when two necessary conditions are met: the spoof trader takes advantage of the incomplete order display set up by the exchange; and the behavioral weaknesses exhibited by numerous individual investors. In addition to these key conditions, this paper finds other ones for market power to be created in the financial market. They are easier, quicker, more secret, more flexible and less risky relative to the conditions for market power building in the goods market.

Practical implications

The detailed analysis points to the behavioral mechanism, i.e. perception alignment, and microstructural mechanism, i.e. incomplete order display, that could be responsive to regulation.

Originality/value

The originality of the findings is to uncover the mechanism of spoofing in taking advantage of behavioral biases of individual investors. The value is to gain more complete understanding of the essence of herding caused by spoofing.

Details

Studies in Economics and Finance, vol. 37 no. 3
Type: Research Article
ISSN: 1086-7376

Keywords

Article
Publication date: 13 June 2016

Timothy Kelley and Bennett I. Bertenthal

Modern browsers are designed to inform users as to whether it is secure to login to a website, but most users are not aware of this information and even those who are sometimes…

Abstract

Purpose

Modern browsers are designed to inform users as to whether it is secure to login to a website, but most users are not aware of this information and even those who are sometimes ignore it. This study aims to assess users’ knowledge of security warnings communicated via browser indicators and the likelihood that their online decision-making adheres to this knowledge.

Design/methodology/approach

Participants from Amazon’s Mechanical Turk visited a series of secure and insecure websites and decided as quickly and as accurately as possible whether it was safe to login. An online survey was then used to assess their knowledge of information security.

Findings

Knowledge of information security was not necessarily a good predictor of decisions regarding whether to sign-in to a website. Moreover, these decisions were modulated by attention to security indicators, familiarity of the website and psychosocial stress induced by bonus payments determined by response times and accuracy.

Practical implications

Even individuals with security knowledge are unable to draw the necessary conclusions about digital risks when browsing the web. Users are being educated through daily use to ignore recommended security indicators.

Originality/value

This study represents a new way to entice participants into risky behavior by monetizing both speed and accuracy. This approach could be broadly useful as a way to study risky environments without placing participants at risk.

Details

Information & Computer Security, vol. 24 no. 2
Type: Research Article
ISSN: 2056-4961

Keywords

Article
Publication date: 16 August 2022

Anil Kumar Gona and Subramoniam M.

Biometric scans using fingerprints are widely used for security purposes. Eventually, for authentication purposes, fingerprint scans are not very reliable because they can be…

Abstract

Purpose

Biometric scans using fingerprints are widely used for security purposes. Eventually, for authentication purposes, fingerprint scans are not very reliable because they can be faked by obtaining a sample of the fingerprint of the person. There are a few spoof detection techniques available to reduce the incidence of spoofing of the biometric system. Among them, the most commonly used is the binary classification technique that detects real or fake fingerprints based on the fingerprint samples provided during training. However, this technique fails when it is provided with samples formed using other spoofing techniques that are different from the spoofing techniques covered in the training samples. This paper aims to improve the liveness detection accuracy by fusing electrocardiogram (ECG) and fingerprint.

Design/methodology/approach

In this paper, to avoid this limitation, an efficient liveness detection algorithm is developed using the fusion of ECG signals captured from the fingertips and fingerprint data in Internet of Things (IoT) environment. The ECG signal will ensure the detection of real fingerprint samples from fake ones.

Findings

Single model fingerprint methods have some disadvantages, such as noisy data and position of the fingerprint. To overcome this, fusion of both ECG and fingerprint is done so that the combined data improves the detection accuracy.

Originality/value

System security is improved in this approach, and the fingerprint recognition rate is also improved. IoT-based approach is used in this work to reduce the computation burden of data processing systems.

Details

International Journal of Pervasive Computing and Communications, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1742-7371

Keywords

Article
Publication date: 19 June 2017

Yang Xin, Yi Liu, Zhi Liu, Xuemei Zhu, Lingshuang Kong, Dongmei Wei, Wei Jiang and Jun Chang

Biometric systems are widely used for face recognition. They have rapidly developed in recent years. Compared with other approaches, such as fingerprint recognition, handwriting…

Abstract

Purpose

Biometric systems are widely used for face recognition. They have rapidly developed in recent years. Compared with other approaches, such as fingerprint recognition, handwriting verification and retinal and iris scanning, face recognition is more straightforward, user friendly and extensively used. The aforementioned approaches, including face recognition, are vulnerable to malicious attacks by impostors; in such cases, face liveness detection comes in handy to ensure both accuracy and robustness. Liveness is an important feature that reflects physiological signs and differentiates artificial from real biometric traits. This paper aims to provide a simple path for the future development of more robust and accurate liveness detection approaches.

Design/methodology/approach

This paper discusses about introduction to the face biometric system, liveness detection in face recognition system and comparisons between the different discussed works of existing measures.

Originality/value

This paper presents an overview, comparison and discussion of proposed face liveness detection methods to provide a reference for the future development of more robust and accurate liveness detection approaches.

Details

Sensor Review, vol. 37 no. 3
Type: Research Article
ISSN: 0260-2288

Keywords

Article
Publication date: 5 May 2015

Matthew Rossi, Greg Deis, Jerome Roche and Kathleen Przywara

– To alert high frequency trading firms to the increased regulation and prosecution of manipulative trading practices during 2014 and early 2015.

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Abstract

Purpose

To alert high frequency trading firms to the increased regulation and prosecution of manipulative trading practices during 2014 and early 2015.

Design/methodology/approach

Reviews four significant proceedings against high frequency trading firms (and/or individuals employed by such firms) and other developments from the relevant government agencies as a possible preview of the enforcement and prosecution of high frequency trading practices in 2015. Provides advice to high frequency trading firms on how to decrease the risk of regulatory or criminal actions against them in this changing environment.

Findings

Although the focus on high frequency trading has only recently begun to intensify, firms should be aware of the increased enforcement activity of the past year. These actions, both regulatory and criminal, have already resulted in large penalties and have helped initiate a strengthening of rules and regulations regarding manipulative trading practices, of which firms need to be aware and stay current.

Practical implications

High frequency trading firms should be aware of the recent regulatory and criminal actions in order to better evaluate their own practices and controls, to ensure that their trading patterns do not resemble manipulative practices, and to avoid similar actions.

Originality/value

Practical guidance from experienced litigators and securities regulatory lawyers, including a former SEC Assistant Chief Litigation Counsel and a former federal prosecutor, that consolidates and describes several recent actions and developments in one piece.

Details

Journal of Investment Compliance, vol. 16 no. 1
Type: Research Article
ISSN: 1528-5812

Keywords

Article
Publication date: 25 November 2013

Paul M. Architzel, Gail C. Bernstein and Mahlet Ayalew

The Dodd-Frank Act added a number of prohibited trading practices on futures markets and swap execution facilities. In May 2013, the CFTC issued guidance on how it intends to…

2004

Abstract

Purpose

The Dodd-Frank Act added a number of prohibited trading practices on futures markets and swap execution facilities. In May 2013, the CFTC issued guidance on how it intends to interpret these prohibitions. Persons trading on these facilities should understand the guidance and how it affects their trading activities. This article aims to focus on the issues.

Design/methodology/approach

The article analyzes the prohibitions and the CFTC's related guidance using a question and answer format to make it accessible to affected market participants.

Findings

The new trading prohibitions include spoofing, violating bids and offers, and recklessly disregarding an orderly close. Different standards of scienter (state of mind) apply to each. Intent is required to violate the anti “spoofing” provision; recklessness is required to violate the disregarding the orderly close provision, but no finding of intent is required for violating bids or offers. The CFTC will evaluate the facts and circumstances at the time of the conduct and look at the available information and what the person knew or should have known.

Practical implications

The Guidance is applicable to all persons who trade on futures markets or on the coming swap execution facilities (SEFs). In particular, persons trading on these facilities should be aware that certain trading practice prohibitions may be violated without a finding of intent.

Originality/value

The antidisruptive prohibitions and guidance are new. Market participants will need to understand and take care to ensure that their trading conduct does not run afoul of these new provisions of the Act and the Commission's interpretive guidance thereunder.

Details

Journal of Investment Compliance, vol. 14 no. 4
Type: Research Article
ISSN: 1528-5812

Keywords

Article
Publication date: 13 July 2015

Swapan Purkait

This paper aims to report on research that tests the effectiveness of anti-phishing tools in detecting phishing attacks by conducting some real-time experiments using freshly…

Abstract

Purpose

This paper aims to report on research that tests the effectiveness of anti-phishing tools in detecting phishing attacks by conducting some real-time experiments using freshly hosted phishing sites. Almost all modern-day Web browsers and antivirus programs provide security indicators to mitigate the widespread problem of phishing on the Internet.

Design/methodology/approach

The current work examines and evaluates the effectiveness of five popular Web browsers, two third-party phishing toolbar add-ons and seven popular antivirus programs in terms of their capability to detect locally hosted spoofed websites. The same tools have also been tested against fresh phishing sites hosted on Internet.

Findings

The experiments yielded alarming results. Although the success rate against live phishing sites was encouraging, only 3 of the 14 tools tested could successfully detect a single spoofed website hosted locally.

Originality/value

This work proposes the inclusion of domain name system server authentication and verification of name servers for a visiting website for all future anti-phishing toolbars. It also proposes that a Web browser should maintain a white list of websites that engage in online monetary transactions so that when a user requires to access any of these, the default protocol should always be HTTPS (Hypertext Transfer Protocol Secure), without which a Web browser should prevent the page from loading.

Details

Information & Computer Security, vol. 23 no. 3
Type: Research Article
ISSN: 2056-4961

Keywords

Article
Publication date: 23 November 2012

Swapan Purkait

Phishing is essentially a social engineering crime on the Web, whose rampant occurrences and technique advancements are posing big challenges for researchers in both academia and…

5908

Abstract

Purpose

Phishing is essentially a social engineering crime on the Web, whose rampant occurrences and technique advancements are posing big challenges for researchers in both academia and the industry. The purpose of this study is to examine the available phishing literatures and phishing countermeasures, to determine how research has evolved and advanced in terms of quantity, content and publication outlets. In addition to that, this paper aims to identify the important trends in phishing and its countermeasures and provides a view of the research gap that is still prevailing in this field of study.

Design/methodology/approach

This paper is a comprehensive literature review prepared after analysing 16 doctoral theses and 358 papers in this field of research. The papers were analyzed based on their research focus, empirical basis on phishing and proposed countermeasures.

Findings

The findings reveal that the current anti‐phishing approaches that have seen significant deployments over the internet can be classified into eight categories. Also, the different approaches proposed so far are all preventive in nature. A Phisher will mainly target the innocent consumers who happen to be the weakest link in the security chain and it was found through various usability studies that neither server‐side security indicators nor client‐side toolbars and warnings are successful in preventing vulnerable users from being deceived.

Originality/value

Educating the internet users about phishing, as well as the implementation and proper application of anti‐phishing measures, are critical steps in protecting the identities of online consumers against phishing attacks. Further research is required to evaluate the effectiveness of the available countermeasures against fresh phishing attacks. Also there is the need to find out the factors which influence internet user's ability to correctly identify phishing websites.

Details

Information Management & Computer Security, vol. 20 no. 5
Type: Research Article
ISSN: 0968-5227

Keywords

Article
Publication date: 1 December 1999

David C. Chou, David C. Yen, Binshan Lin and Philip Hong‐Lam Cheng

Through the tremendous growth of Internet users during the last few years, organizations now realize the potential market of the information highway. However, these organizations…

2470

Abstract

Through the tremendous growth of Internet users during the last few years, organizations now realize the potential market of the information highway. However, these organizations now face the problem of Internet security. The open environment of the Internet contributes greatly to its success, but also plants inherent security problems. Discusses the security frameworks implemented in the cyberspace environment and the current developments and future trends involving this issue.

Details

Industrial Management & Data Systems, vol. 99 no. 8
Type: Research Article
ISSN: 0263-5577

Keywords

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