Samsung biometric security acquisition scam prompts fraud investigation

Oct 11, 2013
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Fake confirmations of Samsung buying a Swedish fingerprint biometrics company have prompted a fraud investigation, after a bogus press release claiming a $650m deal had gone ahead was released. According to the statement, put out on press distributor Cision earlier today, Samsung had acquired Fingerprint Cards in a fully cash deal; however, both Samsung and Fingerprint Cards denied any such deal had taken place, or even that talks had been underway. The scam pushed the Swedish company's stock price up by 50-percent, and prompted NASDAQ canceling a $24.6m trade.

In fact, not only did the NASDAQ cancel the trades - which took place in a roughly seventeen minute window around the release's publication, Reuters reports - and then halt trades on the Fingerprint Cards stock, it also cancelled trades in one of the company's key rivals. Precise Biometrics shares surged up to 44-percent as interest in fingerprint security rose.

"Of course we are going to investigate what has happened" a NASDAQ spokesperson said, "and we are going to do that with the company in question, the FSA (market regulator) and Cision."

Meanwhile, the Swedish Economic Crime Authority has launched its own investigation into the incident.
"There are reasons to believe that someone by a false press release deliberately spread misinformation in order to influence the share price of Fingerprint Cards AB" the agency said (translated through Google) in a statement today. "We see this incident very seriously and investigation of serious scam has begun" deputy chief prosecutor at the Economic Crimes Bureau Olof Kronlund said.

According to Cision, which distributes press announcements among other things, the faked release was part of a "sophisticated fraud"; it's currently unclear who actually published the release. Cision isn't the first such company to be gamed, however. Last year, rival distributor PRWeb was used to publish a fake acquisition announcement claiming Google had bought a wireless hotspot specialist. That $400m falsified deal was also believed to have been intended to artificially drive up the share price of the company.

Fingerprint security has been a hot topic in recent months, particularly with Apple opting to embed its Touch ID biometric system in the home button of the iPhone 5s. Samsung is believed to be working on a similar system for its upcoming devices, while the HTC One Max is also tipped to have biometrics.


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