The securities industry has already been profoundly affected by the Internet. The Securities and Exchange Commission (SEC) now allows publicly traded companies to submit financial information electronically. See www.sec.gov. The Electronic Data Gathering Analysis and Retrieval System (EDGAR) is a system that supports this on-line filing process. The SEC even makes available information on class action securities and fraud litigation. The Internet has also become a forum allowing potential investors to investigate and obtain information on companies. Actual stock purchases are now possible on the Internet. There is even discussion of possibly creating an entirely online stock exchange.
Problems with Online Securities Transactions
The benefits of easy access and the ability to process financial data on a global basis in real-time are enormous for those involved in the securities industry. Unfortunately, the Internet’s ability to enable many people to publish and distribute information regarding securities and potential investments also results in easy access to false information. The flow and availability of information on the Internet is also difficult to monitor. There is increasing concern by federal regulators such as the Federal Trade Commission about online credit scams and deceptive trade practices as well as online investment fraud. There are also new technologies trying to address the situation.
One such technology is a Smart Card. Smart Cards are credit card-size pieces of plastic that contain an embedded micro controller chip. The cards are attached to a personal computer and contain software and hardware security features and can run executable code. With this technology, users of the cards are able to encrypt data within the public-key infrastructure. Businesses dealing with secured transactions should consider such a technology to prevent multiple-user access to a single account.