Hackers Rig Stock Prices

This is probably something you don’t want to read about with Wall Street in turmoil:

Here’s the latest way to score big in the stock market. First, hack into dozens of online traders’ brokerage accounts. Next, buy hundreds of thousands of shares of selected stocks using your hacked accounts, a move that largely moves up the stock price. Then sell your own shares of the same stock that you already owned and profit millions.

It’s like stealing candy from a baby. The only problem with the plan — known as a “hack, pump and dump scheme” — is that it’s illegal in so many obvious ways. Just ask Thirugnanam Ramanathan, a 35-year-old man from India who was sentenced Monday to two years in prison by a U.S. judge for undertaking such a scheme after pleading guilty and agreeing to pay restitution and cooperate. Two others have also been indicted in the overseas conspiracy to defraud U.S. investors.

The trio is accused of stock manipulation via hacking into individuals’ accounts held by TD Ameritrade, Fidelity and, among others, E*Trade.

At least 60 online traders using nine brokerage firms were victimized from late 2006 through 2007, the authorities said.