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Last Updated: Saturday, 6 May 2006, 08:07 GMT 09:07 UK
US 'spyware maker' fined profits
CD drive on computer, Eyewire
The spyware opened CD trays and flashed up fake warnings
A man accused of infecting PCs with spyware has been fined $4m.

The US Federal Trade Commission has ordered Sanford Wallace to hand over the money he made by putting the unwanted software on computers.

The FTC imposed fines because Mr Wallace did not get permission from users to install the software that bombarded them with pop-up adverts.

Mr Wallace has said he has done nothing wrong and is being persecuted for his former involvement with junk mail.

Warning screen

Legal action was first taken by the FTC against Mr Wallace in 2004. Under an agreement brokered between the two in 2005 Mr Wallace agreed to stop putting his advertising programs on computers.

The FTC said that the programs created by Mr Sanford and his company Smartbot.Net exploited a loophole in Microsoft's Internet Explorer browser to install themselves stealthily on PCs.

One program made the computer's CD tray open and then flashed a warning up on screen saying: " If your cd-rom drive's open . . .You DESPERATELY NEED to rid your system of spyware pop-ups IMMEDIATELY!".

The FTC said the software was installed without user's knowledge or consent - a violation of US laws.

A judgement against Mr Wallace and Smartbot.Net orders them to hand over $4,089,500 generated by the spyware.

It also bans Mr Wallace and Smartbot.Net from downloading software to users' machines and stops them using the tactics many spyware firms employ to get their software installed.

The FTC said the judgement is intended to settle the matter and should not be taken as an admission of guilt.

Mr Wallace has denied that he has done anything wrong and said Smartbot.Net has not been active for some time.

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