- An employee of the Securities and Exchange Commission
was
- forced to resign after it was discovered
she had sent sensitive data
- on American computer companies to China in
what U.S. officials say
- may be a case of economic espionage, The
Washington Times has
- learned. Top Stories
-
- Mylene Chan, a computer and online-service
analyst with the SEC
- for 10 months, left the commission in July
after co-workers
- discovered she had compromised sensitive
information by sending it
- to Shanghai, said U.S. government officials
close to the case.
-
- "She was clearly expropriating things
from the commission that
- weren't hers - things that were not public
information and that
- would cause competitive harm to the companies
involved," one
- official close to the case said.
-
- The case was covered up by the SEC and
never reported to the
- FBI as a case of economic espionage, the
officials said.
-
- "We have not seen anything on this,"
an FBI official said.
-
- Numerous U.S. companies whose proprietary
information was
- handled by Miss Chan also were never informed
that their information
- may have been compromised, the officials
said.
-
- Miss Chan stated in an e-mail to The Times
that she was not
- dismissed but resigned before the end of
the one-year probationary
- period of her employment at the SEC.
-
- "Part of my responsibilities at
the SEC was to work with
- representatives of the China and [Hong Kong]
securities commission
- and to assist to educate them about how the
SEC functions and, in
- the course of that, I provided a small number
of SEC materials
- mistakenly, all of which were retrieved as
soon as I learned of the
- mistake," Miss Chan stated.
-
- Miss Chan also said, "I did not
send CTRs to China."
-
- Within the commission, a CTR is a confidential-treatment
- request, secret reports provided by U.S.
companies to SEC that
- contain proprietary and other sensitive information
that companies
- do not want disclosed to the public or to
competitors.
-
- The disclosure that the SEC shared sensitive
corporate data
- with China is the latest problem for the
commission that is charged
- with monitoring the securities industry.
-
- Chairman Harvey Pitt was forced to resign
last week after it
- was disclosed that he had appointed former
FBI Director William
- Webster to an SEC oversight panel. Mr. Pitt
did not disclose to the
- White House that Mr. Webster was on a corporate
audit board of a
- company under SEC investigation.
-
- Mr. Pitt was under fire from critics
over contacts with
- companies under SEC investigation. He also
was criticized by the
- conservative Center for Security Policy for
ignoring the activities
- in U.S. capital markets of companies that
have corporate operations
- in terrorist-sponsoring states.
-
- U.S. officials view the China data case
as either economic
- espionage or state-sponsored espionage involving
China.
-
- An internal SEC document obtained by
The Times shows that Miss
- Chan had access to sensitive information
from more than 15 high-tech
- companies, including several involved in
cutting-edge software
- development.
-
- The document shows that Miss Chan also
processed numerous
- confidential-treatment requests.
-
- Several of the companies whose data
were compromised are
- engaged in security-related work and are
contractors for U.S.
- defense and intelligence agencies.
-
- One company whose internal data were
handled by Miss Chan is
- Veridian, a computer-system designer in Arlington
that, according to
- the company, specializes in "mission-critical
national security
- programs for the national intelligence community,
the Department of
- Defense, and government agencies involved
in homeland security."
-
- A spokeswoman for Veridian said the company
has sent
- confidential, proprietary information to
the SEC but has heard
- nothing from the commission about any compromise
of the data.
- Nothing in the SEC filings contained any
information about the
- company's clients, the spokeswoman said.
-
- Officials said Miss Chan is a Chinese
national who graduated
- from Yale University in 1996 and George Washington
University Law
- School last year before being hired by the
SEC.
-
-
- In an e-mail to several former co-workers,
Miss Chan stated
- July 2, that "for personal reasons,
I am leaving SEC and will be
- returning to Hong Kong. I resigned yesterday."
-
- Miss Chan said in the note that she planned
to settle in Hong
- Kong "for good" in September. "Thanks
a great deal for all your
- help," she wrote. "You all have
been very kind to me. You are
- extremely generous with your time and knowledge,
for which I am
- grateful."
-
- Miss Chan has filed requests for information
from the SEC under
- the Freedom of Information Act in an effort
to find out who within
- the commission was responsible for her forced
resignation, officials
- said.
-
- SEC spokesman John Heine declined to comment
on the
- circumstances surrounding Miss Chan's employment
or whether the case
- is under investigation.
-
- Mr. Heine confirmed that Miss Chan, 28,
left the SEC in July
- after 10 months in the SEC's corporate finance
division.
-
- U.S. officials familiar with the case said
Miss Chan worked in
- the Office of Computers and Online Services.
She was escorted from
- the SEC building by security guards and her
office sealed off July
- 1, the officials said.
-
- The dismissal was triggered by co-workers
who discovered that
- Miss Chan had accessed a commercial database
used by SEC to screen
- companies.
-
- A co-worker in the computer office discovered
that database
- files had been corrupted and that several
e-mails to Miss Chan from
- China were discovered in a computer after
she had used the database
- service. Miss Chan also was found to have
sent sensitive material
- via e-mail to an address in Shanghai.
-
- Miss Chan also worked on the SEC investigation
of the merger
- between computer giants Hewlett-Packard and
Compaq.
-
- According to SEC documents, the number
of confidential
- treatment requests handled by the commission
grew from about 540 in
- 1992 to more than 1,000 in 1996. The confidential
information
- contained in the reports includes financial
data and other
- information about a public company's financial
status and operations.
-
- The confidential-treatment requests that
Miss Chan handled
- during her employment included sensitive
data from Acclaim
- Entertainment, which makes video-game software
for Sony, Nintendo
- and Sega, and Interplay Entertainment, another
major gaming-software
- producer.
-
- Miss Chan also had access to security-related
companies,
- including Verint Systems, which produces
analytic software "for
- communications interception, digital video
security and
- surveillance, and enterprise business intelligence,"
according to
- the Verint Web site.
-
- She also had access to data were from
Citadel Security
- Software, which produces "security and
privacy software" for
- computer networks, and Ion Networks, another
computer-security firm
- that does business with the government.
-
- Security specialists said sensitive information
about the
- companies would be useful to competitors
or to foreign governments.
-
- All site contents copyright © 2002 News World
Communications, Inc.
-
- http://www.washtimes.com/national/20021111-15015960.htm
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