It is axiomatic that the federal securities law regime is designed to mandate dissemination of accurate material information about publicly traded companies. Two of the methods used to tamper with Internet Web sites are file corruption and spoofing. This paper will discuss the ways in which file corruption or spoofing may occur and the myriad of violations these methods may create in the future under the federal securities laws and regulations. File Corruption File corruption describes a situation in which a company's Web site is altered to present different information than the creator of the Web site intended to convey. The prevalence of viruses, media reports of hacking and the increasing level of knowledge about computer programming among the general public evidences the risk that file corruption may occur.
File corruption can arise from inside the company as well as from outside hackers.
An Internet Web site is essentially a series of data files grouped together under an attractive graphics design. Generally, it is common practice for Web site data files to be located on the company's network, because it is easier to change the data files internally or to add new information to the Web site. However, locating the data files on the company's network enables a disgruntled or mischievous employee to alter the information on the data files to retaliate against the company, to influence the stock for his own gain or to tip conspirators to inside information about the company. Moreover, outside hackers can infiltrate the company's security measures to post inaccurate information about the company's operations, financial data, personnel or any other information which the reasonable investor may rely upon in making his investment decisions. One way for an outside hacker to infiltrate the network is by employing devices commonly used by hackers who spread computer viruses.