Fergie's Tech Blog

Hackers Hit Online Brokerages

A Bloomberg News article, via The International Herald Tribune, reports that:

Computer hackers in Eastern Europe and Asia have stepped up fraudulent attacks against customer accounts at U.S. online brokerage firms including E*Trade Financial and TD Ameritrade, according to executives from the companies.

The Federal Bureau of Investigation, the Securities and Exchange Commission and regulators at the NASD are trying to unravel the fraud, which has cost E*Trade of New York at least $18 million and caused losses at Ameritrade of Omaha, Nebraska, the companies said.

In one "pump-and-dump" scheme the SEC uncovered, thieves used customers' money to drive up the prices of little-traded stocks and then sold shares they bought earlier at a profit.

"The perpetrators were more organized, and it was a bigger issue this quarter than it had ever been before," said Jarrett Lilien, chief operating officer at E*Trade. "It wasn't just hitting one company, it was hitting everybody."

posted by Fergie @ 10/23/2006 12:54:00 PM