Tuesday, March 16, 2010

SEC: Hacker Manipulated Stock Prices

David Kravets writes on Threat Level:

U.S. regulators are moving to freeze the assets and trading accounts of a Russian accused of hacking into personal online portfolios and manipulating the price of dozens of stocks listed on the Nasdaq Stock Market and New York Stock Exchange.

A New York federal judge on Tuesday sided with the Securities and Exchange Commission and froze the assets of Broco Investments, believed to be a one-trader operation based in St. Petersburg, Russia. The SEC said Broco capitalized by artificially moving prices of more 38 thinly traded securities — enabling Broco to profit from up-or-down price swings.

“These transactions have created the appearance of legitimate trading activity and have artificially affected the prices of at least 38 issuers,” [.pdf] the Securities and Exchange Commission said in court filing.

The so-called “hack, pump and dump” scheme is among the latest illicit methods of gaming the market though hacking.

More here.


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