Feeds

Three more charged for pump-and-dump hacking

Fed cracking down on securities manipulation

The Essential Guide to IT Transformation

US authorities have charged three Indian nationals for an elaborate pump-and-dump scheme that used hijacked brokerage accounts to manipulate the prices of 14 securities including Sun Microsystems and put options for Google.

The men were charged criminally in a 23-count indictment for conspiracy, securities fraud, wire fraud, aggravated identity theft and computer fraud. They were also sued in civil court in connection with the alleged conspiracy, which netted the perpetrators $121,500 in profit and cost victims a combined $875,000.

Each count for wire fraud and securities fraud carries a maximum of 25 years in prison. Counts for conspiracy and computer fraud carry sentences of up to five years each. The civil action seeks preliminary and permanent injunctions, disgorgement of proceeds and monetary penalties.

This is the fourth account-intrusion case the Securities and Exchange commission has brought since December, each involving defendants based in overseas locations including Estonia and Latvia and now Hong Kong and Malaysia. The computers used in the most recent scheme, which lasted from February to December, 2006, were based in Thailand and India.

According to court documents, Jaisankar Marimuthu, 32, Chockalingam Ramanathan, 33, and Thirugnanam Ramanathan, 34, repeatedly hijacked the online brokerage accounts of unwitting investors and purchased at least 14 securities at above-market prices. Having driven up the stock prices, the men then sold positions of the same securities, which had been purchased with their own online accounts prior to the intrusions.

Two men were were arrested in Hong Kong in December and January. Chockalingam Ramanathan remains at large.

In one instance, Marimuthu used his own E*Trade account to buy almost 23,000 shares of Sun at prices of $4.99 to $5.01 each during after-hours trading on Aug. 31. The following morning, one of more of the defendants used compromised accounts to make unauthorized purchases of about 24,000 shares. Minutes later, Marimuthu sold the 23,000 shares purchased with his E*Trade account, netting him a little more than $1,000 in ill-gotten gains. The trio manipulated Google put options and 12 other thinly traded securities in a similar manner, according to the criminal and civil complaints.

The alleged scheme not only victimized investors, it also harmed the holders of the accounts that were breached. In one instance an account holder who left for five-day fishing trip to Alaska with $180,000 in his online purse returned to a $200,000 deficit. ®

Build a business case: developing custom apps

More from The Register

next story
14 antivirus apps found to have security problems
Vendors just don't care, says researcher, after finding basic boo-boos in security software
'Things' on the Internet-of-things have 25 vulnerabilities apiece
Leaking sprinklers, overheated thermostats and picked locks all online
iWallet: No BONKING PLEASE, we're Apple
BLE-ding iPhones, not NFC bonkers, will drive trend - marketeers
Only '3% of web servers in top corps' fully fixed after Heartbleed snafu
Just slapping a patched OpenSSL on a machine ain't going to cut it, we're told
How long is too long to wait for a security fix?
Synology finally patches OpenSSL bugs in Trevor's NAS
Israel's Iron Dome missile tech stolen by Chinese hackers
Corporate raiders Comment Crew fingered for attacks
Tor attack nodes RIPPED MASKS off users for 6 MONTHS
Traffic confirmation attack bared users' privates - but to whom?
Roll out the welcome mat to hackers and crackers
Security chap pens guide to bug bounty programs that won't fail like Yahoo!'s
Researcher sat on critical IE bugs for THREE YEARS
VUPEN waited for Pwn2Own cash while IE's sandbox leaked
prev story

Whitepapers

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.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Why and how to choose the right cloud vendor
The benefits of cloud-based storage in your processes. Eliminate onsite, disk-based backup and archiving in favor of cloud-based data protection.
The Essential Guide to IT Transformation
ServiceNow discusses three IT transformations that can help CIO's automate IT services to transform IT and the enterprise.
Maximize storage efficiency across the enterprise
The HP StoreOnce backup solution offers highly flexible, centrally managed, and highly efficient data protection for any enterprise.