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1 – 10 of 517Luisa 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.
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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.
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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.
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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.
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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.
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.
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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…
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.
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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.
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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…
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.
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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…
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.
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Robin Mueller, Sebastian Schrittwieser, Peter Fruehwirt, Peter Kieseberg and Edgar Weippl
This paper aims to give an overview on a number of selected applications in comparison to a previous evaluation conducted two years ago, as well as performing an analysis on…
Abstract
Purpose
This paper aims to give an overview on a number of selected applications in comparison to a previous evaluation conducted two years ago, as well as performing an analysis on several new applications. Mobile messaging and VoIP applications for smartphones have seen a massive surge in popularity, which has also sparked the interest in research related to their security and privacy protection, leading to in-depth analyses of specific applications or vulnerabilities.
Design/methodology/approach
The evaluation methods mostly focus on known vulnerabilities in connection with authentication and validation mechanisms but also describe some newly identified attack vectors.
Findings
The results show a positive trend for new applications, which are mostly being developed with security and privacy features, whereas some of the older applications have shown little progress or have even introduced new vulnerabilities. In addition, this paper shows privacy implications of smartphone messaging that are not even solved by today’s most sophisticated “secure” smartphone messaging applications, as well as discusses methods for protecting user privacy during the creation of the user network.
Research limitations/implications
Currently, there is no perfect solution available; thus, further research on this topic needs to be conducted.
Originality/value
In addition to conducting a security evaluation of existing applications together with newly designed messengers that were designed with a security background in mind, several methods for protecting user privacy were discussed. Furthermore, some new attack vectors were discussed.
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