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Spyware used to steal account details then
liquidate, manipulate stocks, SEC says.
High-tech crooks are hijacking online brokerage
accounts using spyware and operating from remote
locations, sometimes in Eastern Europe, U.S.
market regulators said on Friday. The
computer "incursions" are a
growing problem, said Walter Ricciardi,
deputy enforcement director at the U.S. Securities
and Exchange Commission."It's something we're very
concerned about," he said in remarks at a legal
conference in Washington.About 25 percent of U.S.
retail stock trades are made by online investors
through roughly 10 million online accounts,
according to brokerages regulator NASD. Companies
such as Ameritrade (down $0.04 to $16.96, Charts),
Charles Schwab Corp. (down $0.14 to $17.59,
Charts), and E*TRADE Financial Corp (down $0.20 to
$22.86, Charts). offer the accounts.
Crooks will load a victim's computer or a public
PC with a spy program to monitor a user's
activities and capture vital information, such as
account numbers and passwords. The program then
e-mails the stolen information back to the thief,
who can use it to open victim accounts. Once
inside, the thief may sell off an account's
portfolio and take the proceeds. Or electronically
hijacked accounts may be used for "pump-and-dump"
schemes to manipulate stock prices for profit,
Ricciardi said. Public computers in such places as
Internet cafes and hotel rooms are especially
vulnerable to incursions. But home computers may
also be hit as spyware can be imported simply by
opening an e-mail attachment, said John Stark,
chief of the SEC's Office of Internet Enforcement.
Incursion scams under SEC investigation are
far-flung. "We're seeing these frauds in
offshore entities and persons, including those
located in Eastern Europe," Stark said. The
SEC is working to track down the hackers and to
educate online investors, he said. Steps to fight
incursions include securing an online account by
changing passwords frequently and never using an
unfamiliar computer to enter an account number or
password. To fight a similar problem, U.S. banks
are exploring new online banking security
technologies since a study
showed identity theft via online banking is a
fast-growing crime.
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