Thursday, November 03, 2005

SEC says hackers emptying online brokerage accounts

Via BusinessWeek Online.

Arriving home from a five-week trip to Belgium and India on Aug. 14, a jet-lagged Korukonda L. Murty picked up his mail -- and got the shock of his life. Two monthly statements from online brokerage E*Trade Financial showed that securities worth $174,000 -- the bulk of his and his wife's savings -- had vanished.

During July 13-26, stocks and mutual funds had been sold, and the proceeds wired out of his account in six transactions of nearly $30,000 apiece. Murty, a 64-year-old nuclear engineering professor at North Carolina State University, could only think it was a mistake. He hadn't sold any stock in months.

Murty dialed E*Trade the moment its call center opened at 7 a.m. A customer service rep urged him to change his password immediately. Too late. E*Trade says the computer in Murty's Cary (N.C.) home lacked antivirus software and had been infected with code that enabled hackers to grab his user name and password.

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