Feeds

Stock scammer gets coal for the holidays

Illicit use of victims' brokerage accounts

5 things you didn’t know about cloud backup

The US Securities and Exchange Commission put a suspected Russian brokerage-account thief's money on ice last week, after he allegedly used illicit access to people's online portfolios to drive up stock prices.

The SEC charged Grand Logistic SA, a Belize corporation located in Estonia, and its owner Evgeny Gashichev of Russia, with breaking into victims' computers and using the illicit access to their brokerage accounts to drive up stock prices. Between August 28 and October 13, 2006, the illegal scheme made the company at least $353,609, according to an SEC estimate.

Unlike stock spam, which generally results in modest gains for the fraudsters, the illicit use of victim's stock accounts resulted in massive increases, according to the SEC's court filings.

"This is the lazy man's pump-and-dump," Amy J. Greer, district trial counsel for the Philadelphia District Office of the SEC, told SecurityFocus. "It doesn't require them to tout anything."

Stock scams and account intrusion have become increasingly popular schemes for cybercriminals intent on turning a profit. An increase in spam e-mail emanating from bot nets has partially been due to bulk email messages touting stocks as part of a typical scheme to drive up prices. Studies have shown that stock spam can result in an increase in stock price, bumping up the value of volatile over-the-counter stocks by 1.5 to five per cent.

The U.S. Securities and Exchange Commission prosecuted its first account intruder in 2004, when 20-year-old Van T. Dinh was found guilty of compromising a victim's computer and using the account to buy Dinh's $90,000 in "put" options that had become worthless. In October, two US brokerage firms - TD Ameritrade and E*Trade Financial -announced that such scams resulted in more than $22 million in losses in the third quarter of 2006.

In the latest scheme, labeled by the SEC as a "high-tech version of a 'pump-and-dump' manipulation scheme," Grand Logisitics allegedly bought stock in 21 different companies and then used buy orders placed through compromised accounts to drive up the price of those firms' stock.

"These purchases through the intruded accounts created buying pressure and the false appearance of legitimate trading activity, which caused the price of the targeted stock to greatly increase," the SEC stated in court filings. "Once the price had increased, Gashichev then sold, at a profit, the shares he had earlier purchased in the Grand Logistic account."

The scheme was lucrative, according to the SEC.

Choosing thinly-traded penny stocks--in every case the stock traded as less than $1.50 a share - Gashichev allegedly purchased anywhere between 6,000 and 71,000 shares of the targeted stock. The suspect then used access to compromised accounts at E*Trade Securities, TD Ameritrade, Scottrade and other online brokerages to sell existing assets and use the proceeds to buy the targeted stock, according to the SEC filings. By the time the suspect sold the stock, typically on the same day, the price had increased anywhere from four per cent to 158 per cent, the SEC stated.

Secure remote control for conventional and virtual desktops

More from The Register

next story
Ice cream headache as black hat hacks sack Dairy Queen
I scream, you scream, we all scream 'DATA BREACH'!
Goog says patch⁵⁰ your Chrome
64-bit browser loads cat vids FIFTEEN PERCENT faster!
JLaw, Kate Upton exposed in celeb nude pics hack
100 women victimised as Apple iCloud accounts reportedly popped
NIST to sysadmins: clean up your SSH mess
Too many keys, too badly managed
Scratched PC-dispatch patch patched, hatched in batch rematch
Windows security update fixed after triggering blue screens (and screams) of death
Researchers camouflage haxxor traps with fake application traffic
Honeypots sweetened to resemble actual workloads, complete with 'secure' logins
Attack flogged through shiny-clicky social media buttons
66,000 users popped by malicious Flash fudging add-on
New Snowden leak: How NSA shared 850-billion-plus metadata records
'Federated search' spaffed info all over Five Eyes chums
Three quarters of South Korea popped in online gaming raids
Records used to plunder game items, sold off to low lifes
Oz fed police in PDF redaction SNAFU
Give us your metadata, we'll publish your data
prev story

Whitepapers

Endpoint data privacy in the cloud is easier than you think
Innovations in encryption and storage resolve issues of data privacy and key requirements for companies to look for in a solution.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Advanced data protection for your virtualized environments
Find a natural fit for optimizing protection for the often resource-constrained data protection process found in virtual environments.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Next gen security for virtualised datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.