By David Kravets
March 16, 2010
U.S. regulators are moving to freeze the assets and trading accounts of
a Russian accused of hacking into personal online portfolios and
manipulating the price of dozens of stocks listed on the Nasdaq Stock
Market and New York Stock Exchange.
A New York federal judge on Tuesday sided with the Securities and
Exchange Commission and froze the assets of Broco Investments, believed
to be a one-trader operation based in St. Petersburg, Russia. The SEC
said Broco capitalized by artificially moving prices of more 38 thinly
traded securities - enabling Broco to profit from up-or-down price
"These transactions have created the appearance of legitimate trading
activity and have artificially affected the prices of at least 38
issuers," (.pdf) the Securities and Exchange Commission said in court
The so-called "hack, pump and dump" scheme is among the latest illicit
methods of gaming the market though hacking.
An Indian man was sentenced to two years in prison for undertaking a
similar scam in 2008. That same year, a Ukrainian hacked into Thomson
Financial to get a peek about an upcoming negative earnings report for
IMS Health, earning nearly $300,000 for a few minutes' work.
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