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Pump-and-Dump Hacker Gets 2 Years




Pump-and-Dump Hacker Gets 2 Years
Pump-and-Dump Hacker Gets 2 Years



http://www.eweek.com/c/a/Security/Pump-and-Dump-Hacker-Gets-2-Years/ 

By Roy Mark
eWEEK.com
2008-09-08 

The sentence comes in for a participant in a high-tech stock fraud 
scheme that involved hacking into U.S. brokerage accounts to make 
unauthorized purchases of thinly traded stocks to drive up the price. 
When the prices began to rise, hackers then dumped their own shares in 
the same stocks for a profit. The hack, pump and dump scheme hit at 
least 60 online stock traders and nine brokerage firms including TD 
Ameritrade, ETrade Financial, Firstrade Securities, ChoiceTrade, 
OptionsXpress, TradeKing and Terra Nova Financial.

One of the three men charged in 2007 with masterminding an international 
"hack, pump and dump" scheme to hijack brokerage accounts was sentenced 
Sept. 8 to two years in prison. Thirugnanam Ramanathan, 35, a native of 
Chennai, India, and a legal resident of Malaysia, was also ordered to 
pay a fine of $362,247 and serve three years of supervised release.

Ramanathan admitted in his guilty plea that from February through 
December 2006 he participated in hacking into brokerage accounts and, 
once in, illegally used the accounts to make large unauthorized 
purchases of securities in the name of the unsuspecting customers. After 
driving up the price of thinly traded stocks through the bogus stock 
transactions, Ramanathan and two co-conspirators then dumped their own 
shares of the same stock for a profit.

According to the Department of Justice, at least 60 customers and nine 
brokerage firms have been identified as victims with losses of 
approximately $300,000. Online brokerage firms affected included TD 
Ameritrade, ETrade Financial, Firstrade Securities, ChoiceTrade, 
OptionsXpress, TradeKing and Terra Nova Financial. 

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