The CEO’s Ruminations

I powered up my computer the other day and noticed an interesting article regarding the hackers du jour known as “Fancy Bear”.  Allegedly a sophisticated outfit owned and controlled by the GRU, a Russian military intelligence agency, Fancy Bear apparently attempted to create fake internet domains mimicking conservative Yank political institutions.  Microsoft, the media-proclaimed “Internet Cop”, claims to have thwarted these efforts (https://wsmh.com/news/nation-world/microsofts-anti-hacking-efforts-make-it-an-internet-cop).

Fakes?  Mimicking?  Microsoft as altruistic, Internet saviour?  Hmmm…

“Always judge a book by its cover.” – Derek Elmer

That’s right!  In the world of modern cyber-scams, you always need to accept my new twist on the old idiom “Don’t judge a book by its cover”.

Why should you judge a book by its cover?  The simple answer is to protect yourself against conduct similar to those naughty bears and, in a word phishing or the attempt to obtain sensitive information like username, password, bank details, the details of staff in a position to transfer funds.  For example, the Hong Kong Police recorded 653 cases of cybercrimes in 2005, which was the first year it began tracking such offences.  By 2016, the number of cases reached 5,939 in 2016 and resulted in HK$2.3 billion of losses to the victims!

Ouch…some fairly big winners and losers in this scenario.  Hard to blame the real police as they usually only get involved after the horses have bolted from the barn.  Heck, people (I use the term loosely) even publish information on “how to create a Facebook Phishing Page”.  I did not click on the link, which is www.hackingloops.com/how-to-create-a-facebook-phishing-page…perhaps you are braver (I use the term sarcastically) and want to give it a go.

However, in my never-ending search for a culprit and in view of Microsoft’s apparent, recent defeat of the naughty bears, I decided to have a look at these new Guardians of Cyber World – the likes of Yahoo!, Facebook, Google, Microsoft – as well as some governments’ efforts to protect us.

Are they doing enough or for that matter anything to educate their clients?  Does the average Internet user know anything about how to protect himself/herself?  Are there pro-active, “good samaritan” sites out there?

Let’s take a look at a small sampling of “free” websites offering education and reporting.  I avoided the plethora of consultants offering to protect you albeit I have to confess many offer some good solutions.

First, as in any new endeavour, I thought it useful to start with education.  Our Guardians of Cyber World are publishing quite a bit of information to get you up to speed on the “do’s” and “dont’s”.  Below is a sampling.

Yahoo!www.safety.yahoo.com/Security/PHISHING-SITE.html

Yahoo!: https://finance.yahoo.com/news/how-to-avoid-phishing-scams-79488548827.html

Facebook: https://www.facebook.com/help/166863010078512?helpref=faq_content

Facebook: https://www.facebook.com/notes/aqib-mehmood-official/12-steps-to-avoid-phishing-scams-/581509021960999/

Google:  https://support.google.com/mail/answer/8253?hl=en

Google:  https://support.google.com/websearch/answer/106318?hl=en

Microsoft:  https://docs.microsoft.com/en-us/office365/securitycompliance/anti-phishing-protection?redirectSourcePath=%252fen-us%252farticle%252fanti-phishing-protection-in-office-365-75af74b2-c7ea-4556-a912-8c48e07271d3

I truly believe, whether for your personal benefit or to assist your employer, that reviewing some of these websites would be useful.

Second, if the horses have already bolted from the barn or you are feeling some of the “good samaritan” vibe, you have many private avenues offered by the Guardians of Cyber World to make a report.  I do not wish to make light of the importance of such reporting.  You may not have solved a problem for yourself, but reporting a website designed for phishing may save someone else…and I believe good deeds often come around full-circle to everyone’s benefit…call it karma.

Yahoo!:  https://safety.yahoo.com/Security/REPORTING-ISSUES.html

Facebook:  https://www.facebook.com/help/217910864998172

Google:  www.support.google.com/faqs/answer/2952493?hl=en

Google:  www.safebrowsing.google.com/safebrowsing/report_phish/?hl=en

Microsoft:  www.support.microsoft.com/en-us/help/930167/how-to-report-a-phishing-web-site

Microsoft:  https://docs.microsoft.com/en-us/office365/securitycompliance/submit-spam-non-spam-and-phishing-scam-messages-to-microsoft-for-analysis

Last, but certainly not least, governments in every corner of the globe are offering educational opportunities and reporting sites.  Frankly, I was extremely happy to see my tax dollars being spent fairly wisely on an important subject!

Hong Kong:  https://www1.erc.police.gov.hk/cmiserc/EGIS-HK-Web_NEW_UI/ereport_details?report=CBR_CRIME&fontSize=100

Australia:  https://www.acorn.gov.au/learn-about-cybercrime/email-spam-and-phishing

UK:  https://www.actionfraud.police.uk/report_phishing

USA:  www.irs.gov/privacy-disclosure/report-phishing

USA:  www.consumer.ftc.gov/articles/0003-phishing

USA:  www.us-cert.gov/report-phishing

Remember the nursery rhyme “The bear went over the mountain / To see what he could see / The other side of the Mountain / Was all that he could see.”

Well, this time the naughty bear went over the mountain and Microsoft apparently stopped him from seeing anything.  I hope you take the time to learn about this dangerous bear and others so you too can smack their little snouts!

I-OnAsia has an extensive bespoke “Anti Phishing Educational Awareness Programme” for all levels of management and all areas of sensitivity. For a consultation please contact us without delay on – info@ionasia.com.hk

The CEO’s Ruminations

As I put my chubby thumbs and forefingers to keys, I could not avoid ruminating about The Donald’s never-ending tweet-screaming at the discredited Russian “collusion” investigation; London Mayor Sadiq Khan’s feeble attempt to explain news that the city’s death rate from knife and gun crime had overtaken that of New York; Japan suffering dozens of sad and, I would have thought, unnecessary deaths from temperatures exceeding 40C; New Zealand’s interim-PM misusing some apparent downtime to whine about Australia “copying” the Kiwi flag; Zimbabwe celebrating a perplexing non-Mugabe era; European tourists mooning the ancient ruins of Machu Picchu; and, well, you get the picture.

The world truly is a tad barmy…

Chew on that thought for a moment…

I-OnAsia eschews ad hominen attacks whilst opening an office in Canada

Whilst The Donald spewed and the Suave Justin politely deflected, I-OnAsia quietly planted a flag in the luvly town of Kelowna, British Columbia, Canada.

Our new office is managed by the no-nonsense Corrine Reid.

Corrine earned a BA in business administration, which prepared her not to suffer any BS during her career in senior positions of the usually all-male world of large sports associations.

She will be responsible for the growing business ties between Canada and Asia. I believe government and private joint initiatives, such as The Canada-Asia Trade and Investment for Growth Program, will create opportunities for Corrine to market I-OnAsia’s myriad of investigative services.

In addition, Corrine will manage our existing business in the western USA, particularly from the growing markets of Portland and Las Vegas.

What happens in Las Vegas may stay in Las Vegas, but Corrine is just the professional to overcome the opaqueness…unless, of course, the client is seeking an alternative solution!

The CEO’s Ruminations

While celebrating or bemoaning (depending upon your perspective) the 21 years since resumption of sovereignty or handover or takeover of Hong Kong to China (depending upon your politics), I had time to contemplate the soon to be enacted Cross-boundary Movement of Physical Currency and Bearer Negotiable Instruments Ordinance of Hong Kong (the “Ordinance”). No doubt the luvly bubbles of Krug pulsating down my palate inspired me to put chubby fingers to keys in anticipation of what I have dubed “No Cash Day” on 16th July.

Prior to what you no doubt will consider to be a rivetting repartee, how about the World Cup? Japan? Russia? Jolly Ole England? No Germany, Argentina, Portugal or Spain? No Messi or Ronaldo? I almost thought I would wake up, pinch myself and discover China or even Hong Kong in the Quarters with Xi Jiping or Carrie Lam leading the charge. Oh my ears and whiskers…

Back to business. The Financial Action Task Force (the “FATF”), an inter-governmental body with 37 members (35 out of 195 countries), was established in 1989 “…to set standards and promote effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats to the integrity of the international financial system.” Despite representing only 18% of the sovereign states on the planet, the FATF states quite unashamedly that it “…has developed a series of Recommendations that are recognised as the international standard for combating of money laundering and the financing of terrorism and proliferation of weapons of mass destruction.”

Bottom line: the FATF is an undemocratic, battering ram of global heavyweights – China, Europe, Russia and the USA – seeking to impose “standards” upon the other 82% of financially and militarily less powerful liliputian states.

Alas, Hong Kong is set to succomb to the almighty FATF after successfully withstanding the onslaught of five iterations of the Recommendations since 1990. On or after “No Cash Day”, if you visit Hong Kong with HKD120,000 (or equivalent thereof) or more of currency or bearer negotiable instruments, then you must disclose the same to the relevant Custom’s officer. Singapore, the island state to which Hong Kong is often compared/contrasted, fell prey to the FATF much earlier, and in 2014 decreased the the threshold for reporting to SGD20,000 (USD15,000).

Let’s have a brief, critical look at the most recent, 2012 Recommendations (in particular number 32) and the Ordinance while positing possibilities of legally sidestepping the same.

“In God We Trust…All Others Pay Cash” – Novel by Jean Shepherd

Since the 1800s, “In God We Trust” has been emblazoned upon the currency – coin and paper – of the USA. The Yank novelist had a bit of fun with the phrase while recalling childhood memories. Good read.

Bin that phrase! Many of us may still trust in God, however defined, but cash no longer seems to be acceptable. Many a car park in Hong Kong posts signs clearly stating “no cash”.

Thus, I make a leap to number 32 of the Recommendations with a slightly edited version reproduced as follows:

“Countries should have measures in place to detect the physical cross-border transportation of currency and bearer negotiable instruments…should ensure that their competent authorities have the legal authority to stop or restrain currency or bearer negotiable instruments that are suspected to be related to terrorist financing, money laundering or predicate offences, or that are falsely declared or disclosed.…should ensure that effective, proportionate and dissuasive sanctions are available to deal with persons who make false declaration(s) or disclosure(s).”

Yes, even when edited, that is a mouthful. Let’s give it some thought.

First, please do not be fooled by the word “recommendation”. The FATF states quite clearly in its Glossary that “For the purposes of assessing compliance with the FATF Recommendations, the word should has the same meaning as must.” Translation: it is our way or the financial-ruination-highway.

Second and not surprisingly, the Ordinance albeit using fancier language like “conveyance” rather than “transportation” and “import”/”export” rather than “in-bound”/”out-bound”, largely follows Recommendation 32. I gather the drafters felt a need to earn their keep (our tax dollars) by improving on the language. Kudos!!!

Third, while I was perusing the Glossary, I noticed the FATF defines physical cross-border transportation as “any in-bound or out-bound physical transportation of currency or BNIs from one country to another country…including (1) physical transportation by a natural person, or in that person’s accompanying luggage or vehicle; (2) shipment of currency or BNIs through containerised cargo or (3) the mailing of currency or BNIs…”; currency as …banknotes and coins that are in circulation as a medium of exchange”;…and “bearer negotiable instruments”, “…monetary instruments in bearer form such as: traveller’s cheques; negotiable instruments (including cheques, promissory notes and money orders) that are either in bearer form, endorsed without restriction, made out to a fictitious payee, or otherwise in such form that title thereto passes upon delivery; incomplete instruments (including cheques, promissory notes and money orders) signed, but with the payee’s name omitted.”

Hmmm…does that cover diamonds or gold bullion? Nothing specific in the FATF or the Ordinance. The Yanks address the issue in the Customs Declaration Form 6059B if and only if you happen to turn over the form and read explanatory note 13, which uses the language “…$10,000 or more in U.S. dollars or foreign equivalent in any form…”

Hey, what about cryptocurrencies? If I flew into Hong Kong with the username, password and whatever other form of access code may be required (Ethereum calls it a “wallet”), did not disclose my possession of the same and then used that information to exchange my cryptocurrency into Hong Kong in excess of the threshold amount of HKD120,000, would I be facing the Ordinance’s maximum fine of HKD500,000 and two years in prison? What if I flew into the UK (similar FATF laws) and used a Bitcoin ATM?

Finally, is this sort of FATF-compelled legislation really achieving the stated objectives? In 2017, the Hong Kong Tourist Association reported total visitor arrivals of 58,472,157 of which 44,438,839 were from Mainland China. Let’s say 0.1% of our friends from the Motherland each legally imported HKD110,000 into Hong Kong. HKD5 billion or approximately USD630 million!!! (As an aside, I should have thought these figures would make one wonder why Hong Kong is the most expensive real estate market in the world).

Call me crazy, but even if 1% of that money (USD6.3 million) was used for, say, terrorist financing, then I think it fair to say one of the objectives, if not the most important, of Recommendation 32 and the Ordinance easily could have been flouted by naughty actors.

Something to ponder when 18% of the countries of the world with all the power treat the other 82% like naughty children by imposing rules that Little Johnny seemingly can quite easily sidestep.

Shudder the thought but perhaps the members of the FATF have other, undisclosed, objectives, i.e. even greater control by government of the people?

“It is the people who control the Government, not the Government the people.” – Winston S. Churchill

Really Winston!? Perhaps a better time. Just a thought…cheers!

COO James Tunkey Briefs Retired FBI Agents

Photo from left: Charlie Beaudoin, Scott Olson, James Tunkey, Tim Screen.

I-OnAsia’s Chief Operating Officer provided a briefing to New York Chapter of The Society of Former FBI Agents at a recent meeting.  During the briefing, Mr. Tunkey reviewed key trends discussed in his April Insights Guide, published by Compliance Week.  Mr. Tunkey’s presentation focused on the strengths of China’s economy, challenges affecting businesses in Asia, the importance of global institutions, and the importance of resolving current challenges in the relationship between the United States and China.

The CEO’s Ruminations

I apologize profusely to those of you who tinkled regarding my failure to ruminate, at least publicly, over the last few months. Suffice it to say, life and all its odd permutations have had me hopping.

Hey, let’s hear it for The Donald and Rocket Man!!! I definitely have my issues with both of these fellas and their new “bromance”, but I am giddy as a teenage gal dressing for her first “date” that leaders of two countries with nuclear weapons are breaking bread rather than uttering threats and/or lobbing bombs. Baby steps are better than “ad hominem” attacks (ya gotta love those polite Canadiens), man-made craters or loss of life in my book. Watch this space…we just might be saying “thanks” to two unlikely heroes.

Back to business. Did you happen to see the Mark Cuban produced, Netflix flick aptly entitled The China Hustle? Basically a story of robber baron Yanks mining the less than transparent corporate world of China for the purpose of flogging shares on USA stock exchanges/markets. These sort of developments always require two greedy parties, i.e. the investors and the promoters/companies. The China Hustle adds some usually missed third parties to the mix, i.e. regulators and financial functionaries (lawyers, accountants, banks).

Bottom line: a plethora of Chinese companies are now being de-listed, sued for fraud and generally being shown to have participated in a multi-billion USD scam.

I raise this story because the largest failure was in the pre-IPO (pre initial public offering) due diligence process. Basically, if a big law firm or one of the final four accounting firms said “OK”, then the shares of the companies were listed/quoted and investors bought with the confidence of gold at the end of the rainbow.

This is where I-OnAsia makes a difference. We work with the big law firms, final four accounting firms, promoters, etc, to ensure full disclosure and the offering memorandum is accurate.

Whether it is Hong Kong, Singapore or any of the stock exchanges/markets in the USA, we roll up our sleeves and have a look under the hood, so to speak!

“All that glisters is not gold…” – The Merchant of Venice, Act II, Scene VII, William Shakespeare

The Bard, yet again, was years before his time in speaking truth.

Pre-IPO due diligence, basically, covers any activity the objective of which is to achieve transparency and to ensure what is promoted to the investing public via the offering memorandum or other mediums is accurate.

Large-scale IPOs require lawyers, accountants, specialists (surveyors, engineers, etc), regulators and even private investigation firms to sift through an enormous amout of information provided by the company.

I am confident you will not be surprised to learn the company believes it is perfect. This is the moment the Bard’s warning rings true.

Nothing is perfect!!!

Equally, I can tell you the amount of information, useful or otherwise, provided and often not provided (but discovered) is mind boggling. Given the numerous methods by which communication is plastered all over our faces on a daily basis, it is true to say “We are drowning in information but starved for knowledge.” (John Naisbitt)

Why hire I-OnAsia to handle such an important element of an initial public offering?

First and with my usual diplomatic approach to all matters, we do not rip-off and OVER-charge our clients. We have noticed how some of our so-called competitors dress-up similar services simply to charge exorbitant fees. I am a big fan of earning a fair wage for our services. However, if the waiter adds a zero to an excellent meal, then I take umbrage.

Second, we specialize in the search for knowledge in a cost and time-effective manner. Such services include, but by the very nature of the beast are not limited to and continually are being enhanced, the following:

  • Organization and Good Standing. Does the company acutally exist and is authorised to do business? Did the company pay its annual government fees?
  • Previous Financing Efforts. What sort of private offerings, debt arrangements, preferred securities, etc., pre-date the IPO?
  • Financial Information. Has the accountant been paid off? Did the auditor really check the numbers with what is happening on the ground?
  • Physical Assets. Is the inventory fairly valued? Does it even exist? Does the machinery actually work?
  • Real Estate. Is the factory really situated on 100 acres?
  • Intellectual Property. Trademarks? Patents? Knowhow? What is owned and by whom? Is it adequately protected?
  • Employees and Employee Benefits. Credentials? Are they legally allowed to work for the company in that country? Are they compensated fairly? Are their benefits excessive?
  • Licenses and Permits. Simply put, is the company authorised by the relevant government agency(ies) to do its business?
  • Environmental Issues. Is the factory situated on a toxic waste site?
  • Taxes. Is the company current? Any tax liens?
  • Material Contracts. Loans? Stock options? Non-disclosure? Non-competition?
  • Product or Service Lines. Existing? Under development?
  • Customer Information. Major? Marketing and advertising? Competitors?
  • Litigation. Contingent liabilities, material commitments, government action or any of those now fairly common sexual harrassment claims? Criminal matters?
  • Anti-bribery and foreign corruption. Does the company have policies to meet these legal requirements?
  • Insurance Coverage. Do they have health and/or life insurance for employees? Do they have D&O liability insurance? Are machines and other equipment covered? Is coverage sufficient?
  • Professionals. Were they simply hired as a “label” or did they actually do their jobs?
  • Articles and Publicity. Positive or negative image? Is the company or its executives/employees active in social media?

Doing extensive homework takes time, effort and focus on the ultimate goal of ensuring transparency and accuracy.

Third and as I always point out in virtually every Rumination, the very nature of our team is to be skeptical. We adhere to Arthur Conan Doyle’s truism that “There is nothing as deceptive as an obvious fact.” Simply stated, when working for a client, we take the position that all obvious facts are nothing but well-dressed deceptions seeking a colonosocopy-like investigation.

Finally, we have the global network to ensure the correct subject matter experts are employed to handle the job.

Are you going public? Are you a professional seeking some additional and necessary pre-IPO investigative assistance?

Tinkle me…