facebook
twitter
rss
account
search
search
 

Thieves raid accounts in penny-stock scam

March 8, 2007 at 6:45 PM   |   Comments

WASHINGTON, March 8 (UPI) -- Overseas thieves hacked into dozens of online brokerage accounts and stole customer money to pump and dump penny stocks, U.S. regulators allege in a lawsuit.

The unidentified thieves made at least $732,941 in illegal profits and seven brokerage firms lost more than $2 million in making their customers whole, the Securities and Exchange Commission says.

Among the brokerage firms where accounts were hijacked were E*Trade Securities, TD Ameritrade, Charles Schwab, Scottrade, Fidelity Investments, Merrill Lynch and Vanguard Brokerage Services, The San Francisco Chronicle reported.

The thieves did not penetrate the brokerage firms' infrastructure or security systems, said SEC Internet enforcement chief John Reed Stark.

Authorities said the trading manipulation appears to have begun in December 2005 and continued for at least a year. The intruders hacked into online accounts of unsuspecting brokerage customers, placed unauthorized orders to buy shares in tiny companies and then sold the shares from their own accounts once the stock prices rose.

Regulators froze $3 million of proceeds in an account at JSC Parex Bank, based in Riga, Latvia, and at Pinnacle Capital Markets in Raleigh, N.C., which handled U.S. trading for the Latvian account.

Topics: John Reed
© 2007 United Press International, Inc. All Rights Reserved. Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.
Recommended UPI Stories
Featured UPI Collection
trending
2014: The Year in Music [PHOTOS]

2014: The Year in Music [PHOTOS]

Most Popular
1
Laundry drying sparks 'smart skin' concept for aircraft
2
Native concerns over oil vetted in Canada
3
Russia's Rosneft grabs Norwegian drilling assets
4
Gulf of Mexico lease draws advocacy fire
5
Scottish tidal array may be largest of its kind
Trending News
Video
x
Feedback