SEC Charges Hackers With Pumping Google
Three Indian nationals have been charged as part of the Securities and Exchange Commission’s investigation into pump and dump stock schemes the boosted prices for fourteen stocks, including Google and Sun Microsystems.
The trio, identified in an SEC statement as Jaisankar Marimuthu, Chockalingam Ramanathan and Thirugnanam Ramanathan, broke into online brokerage accounts and used them to hike the prices of at least fourteen stocks.
Two of the accused were arrested in Hong Kong in the past few months, but Chockalingam Ramanathan is at large.
The US Attorney will try to get the two men in custody extradited to Nebraska.
There, they will face a 23-count indictment unsealed in federal court. SEC Chairman Christopher Cox said in a statement, "We will go anywhere on earth to stop these thieves and hold them accountable."
By using stolen logins from online brokerage customers, the group used funds to enhance positions they had taken on at least fourteen stocks.
They placed "out of the money" put options on Google’s stock. The group’s crimes took place between July and November 2006.
The SEC explained what happened next:
Then, without the accountholders’ knowledge, and using the victims’ own accounts and funds, the Defendants placed scores of unauthorized buy orders at above-market prices. After these unauthorized buy orders were placed, the Defendants sold the positions held in their own accounts at the artificially inflated prices, realizing profits of over $121,500.
"It is particularly troubling that, aside from profiting from their scheme, the Defendants caused over $875,000 in damage to the brokerage firms whose customers’ accounts were compromised," said Linda Thomsen, Director of the SEC’s Division of Enforcement.
In one customer example, the SEC said a victim had $180,000 in cash and equities in an online brokerage account.
He took a five-day fishing trip, and returned to find out he had been phished; his account held a balance of negative $200,000.