Pump-and-Dump Hacker Gets 2 Years
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.