Posted by arlene

Besides gambling, there are criminal acts in which your company’s employees can participate while logging on to the Web. The SEC has been cracking down on stock fraud perpetrated by misleading other online investors about a stock in a chat area, an activity that may affect even your own company’s share price. Employees with options may try to boost the stock price with insider information or outright lies posted to investment sites.

The FTC takes a dim view of misleading or fraudulent claims about products being sold through Web sites, and your colleague may be managing such a virtual store over a lunch break. Another area of abuse involves pedophiles who have learned to practice their “craft” by assuming false identities online and luring their underage victims via chats to meetings after hours.

Illegal activity is one thing—what about illegal materials? Certain types of documents, images, and other information are not only unlawful to produce, but illegal to have at all. Child pornography is a prime example. Because today many people have their primary and fastest Internet access at work, and because so much material, including illegal material, is available anonymously and conveniently online, employees are using company systems in record numbers to download questionable items.

Child pornography is not the only type of material which is illegal to download, and whose mere presence can cause a company embarrassment or prosecution. In some cases, specific types of information have been interdicted for public policy reasons, such as 128-bit encryption algorithms. The export controls for encryption have been described as prohibiting any kind of export, from shipment of disks containing encryption software to a T-shirt on which an encryption algorithm is reprinted. If your employees access your computer network outside of U.S. borders (either in a foreign office, or via a dial-up from a hotel room or conference center overseas) and download a high-level encryption program or any software containing such programs, they may be breaking the law, and the computer that they are utilizing could theoretically be seized for evidence. Obtaining some types of military-related information (nuclear weapon technology, designs for super-computers, and even instructions for making explosives) can be illegal without proper authorization. In the aftermath of the 1995 Federal Building bombing in Oklahoma City and the Columbine High School massacre in 1999, the U.S. Congress made it illegal to transfer or receive bombmaking information via the Internet, even though the same information may be freely and legally gotten from almost any public library.

Addressing such risks can be tricky. Many downloaders will not know that the file they’ve requested, or the Web page they’re reading, puts them at risk of arrest or even imprisonment. Others will know, or perhaps should know, but differentiating them from innocent downloaders can be a matter for a jury rather than a staff manager. Further, a company that discovers illegal materials on its servers or users’ PCs may be under a legal obligation to report the illegality and to bring authorities into the picture, whatever the potential impact on the company’s reputation or the possibility of criminal prosecution of the company may be. In the event something like this occurs at your company, it is a very good idea to get advice of counsel knowledgeable both in employment and criminal legal issues.

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