Fergie's Tech Blog

3 Men Indicted in Stock Hacking Scheme - UPDATE

An AP newswire article, via Yahoo! News, reports that:

Three men from India were indicted Monday on federal charges of hacking into online brokerage accounts and pumping up stock values to turn a hefty profit for themselves, the Justice Department said.

The alleged "hack, pump and dump" scheme has cost one brokerage firm at least $2 million in losses, prosecutors said. An estimated 60 customers and nine U.S. brokerage firms were duped in the case during a four-month period last year, prosecutors said.

According to the 23-count indictment, unsealed in Omaha, Neb., the three men bought stocks through the U.S. online firms with their own accounts. Operating from Thailand and India, the men then allegedly used stolen identity information to pose as other online share-buyers — inflating the value of the stock.

The men then sold their own shares at a higher price — turning a substantial profit, prosecutors said.

posted by Fergie @ 3/12/2007 10:05:00 AM