Federal government funding cuts may impede the Australian Securities and Investment Commission's policing of Internet scams.
ASIC has confirmed there's a growing trend of misleading Internet spamming and postings on Internet bulletin boards that induce investors to purchase securities. And last year's AU$2 million slash in funding by the federal government may now slow ASIC's progression in stamping out the practice.
"ASIC is operating on a shoestring," ASIC's director of electronic enforcement, Keith Inman, told ZDNet.
Last year, ASIC's proposal for electronic-enforcement funding was rejected by the federal government and in the near future ASIC may need to turn to the government again for additional funds to enable the transition of Internet detection software that's currently being trailed.
Other than approach the government for further financing, ASIC would have to redirect funds from other areas of the organisation.
This is "less likely", according to Inman. "[ASIC's] already had a significant reduction in funding over the last year," he added.
"I have no reason for concern, yet no reason to be optimistic [either]," Inman said.
Spamming constitutes the largest proportion of Internet-related complaints ASIC receives.
In 1998, ASIC logged around eight complaints regarding online conduct, the following year this had skyrocketed to over 80 and in September this year complaints hit the 120 mark.
"It's an additional workload, [with] no more resources," Inman said.
ASIC's Sydney-based Electronic Enforcement Unit (EEU) operates with just four staff and provides other Australia-wide investigative branches with technical expertise.
In contrast, ASIC's sister agency, the US Securities and Exchange Commission, has had AU$24 million in funding for a new branch staffed by over 100 people, according to Inman.
With the absence of that level of funding and online securities crime increasing, Inman said the EEU is "trying to find ways to work smarter".
One such way involves the use of Web Hound software that will automate the process of sweeping the Internet for security scams.
Trialed for a fortnight now, Web Hound has the ability to trawl thousands of sites in a few hours and will alleviate EEU's limited resources.
EEU hopes to prove the concept by Christmas, when it will need to look for additional funding.
Another ASIC spokesperson said federal government funding cutbacks were related to the GST challenge. The government declined to comment. .
