The Securities and Exchange Commission is gearing up to let loose a Web crawler hunting Websites, message boards, and chat rooms for hints of stock fraud - and privacy advocates aren't exactly going ring-a-ding-ding over the idea. PriceWaterhouse, in fact, is ringing sour tones over the idea.
"[This] is equivalent to, in my opinion, wiretapping... the equivalent of planting a bug," says Larry Ponemon, PriceWaterhouse partner in charge of privacy issues, tells the Associated Press.
But the Wall Street bad guys "are using the new technology at hand, and the cops need to use the technology to stay ahead of the crooks," North American Securities Administrators Association executive director Marc Beauchamp tells the AP.
The SEC had brought in PriceWaterhouse and over a hundred other firms to help develop and run the fraud-hunting system, but PriceWaterhouse is now the first of them to back away. The consulting giant says the SEC "crawler," which would smoke out such "suspicious" phrases as "get rich quick," could run afoul of the Constitution's ban on unreasonable search and seizure.
The SEC says it won't go anywhere except public forums like Web pages and newsgroups, which it already reviews by hand, but expensively, the AP says. The agency says stock fraud is now so persuasive and simple online it has to accelerate the fight. And the agency further assures the AP it will "never attempt to monitor private exchanges such as e-mail."
The Libertarian Party isn't buying it. "This is government spying on the innocent, plain and simple," says party spokesman George Gertz. "It's no different than the police tapping everyone's phones because someone might have committed a crime."
The SEC's prosecutorial authority, though, is limited to filing civil lawsuits - such as the case which turned former porn star Kathryn Gannon (a.k.a. Marylin Star) into a fugitive in Canada. She's wanted in a case where she's alleged to have pocketed over $80,000 trading stock on advance bank merger information from investment banker James McDermott that she then allegedly shared with industrialist Anthony Pomponio - who also made a reputed $80,000+ in the deal.
