Online Stock Fraud- More Than $2million Hacked By A Latvian Hacker
A Latvian man has been charged by the US financial regulator for an alleged online stock fraud that cost investors more than $2 million (£1.3 million), and may have enabled him to profit over half a million pounds. The SEC accuses Igor Nagaicevs, 34, of hacking the accounts of electronic broker-dealer firms and illicitly trading stocks through them as part of a "brazen stock price manipulation scheme". The regulator alleges the Latvian hacked into the accounts and made unauthorized trades of securities 159 times between 2009 and August 2010, racking up total profits of $874,896 (£557,000) through an operation it says enabled him to "consistently derive quick trading profits" even when prices were only slightly manipulated.
As a result of his activity the prices of over a hundred NYSE and Nasdaq-listed stocks were affected and investors lost large amounts of money. The SEC complaint, lodged in federal court in San Francisco, claims that Nagaicevs's scheme followed the same pattern on each occasion. This started by establishing a long or short position in a traded security through unregistered brokerage firms, who provided him with anonymous and direct access to the US securities market. He then hacked into the online accounts of other broker-dealer companies, using their client investors' cash to make unauthorized trades of stocks and securities in order to manipulate market prices. This left him in a position to reap huge gains - in effect by buying back or selling the same stocks at artificial prices, thereby realising a profit on transactions.
In one such incident it is alleged Nagaicevs generated profits of $14,000 in just 32 minutes by driving up the stock price of a NYSE-listed company before liquidating his position. The losses of all investors who fell prey to his scheme were reimbursed by the broker-dealer firms they held accounts with. The SEC charge sheet did not however detail exactly how Nagaicevs gained access to the compromised accounts. FINRA, the self-regulatory body for broker-dealers in the US, has since warned investors to be viligant of email hack attacks that can lead to theft from investor accounts.
As a result of his activity the prices of over a hundred NYSE and Nasdaq-listed stocks were affected and investors lost large amounts of money. The SEC complaint, lodged in federal court in San Francisco, claims that Nagaicevs's scheme followed the same pattern on each occasion. This started by establishing a long or short position in a traded security through unregistered brokerage firms, who provided him with anonymous and direct access to the US securities market. He then hacked into the online accounts of other broker-dealer companies, using their client investors' cash to make unauthorized trades of stocks and securities in order to manipulate market prices. This left him in a position to reap huge gains - in effect by buying back or selling the same stocks at artificial prices, thereby realising a profit on transactions.
In one such incident it is alleged Nagaicevs generated profits of $14,000 in just 32 minutes by driving up the stock price of a NYSE-listed company before liquidating his position. The losses of all investors who fell prey to his scheme were reimbursed by the broker-dealer firms they held accounts with. The SEC charge sheet did not however detail exactly how Nagaicevs gained access to the compromised accounts. FINRA, the self-regulatory body for broker-dealers in the US, has since warned investors to be viligant of email hack attacks that can lead to theft from investor accounts.
-Source (Computer World)
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