Key Loggers Strike Online Brokerage Houses

from the costly-security dept

One of the more popular identity theft scams these days is to use keyloggers to get someone’s bank account info and then take their money. However, it looks like some organized crime groups have taken this up another level with some online brokerage houses. Apparently, both TD Ameritrade and E-Trade were recently victims of multimillion dollar frauds when identity thieves used all of the accounts they had collected up to stage a huge pump-and-dump scam. Basically, they collected a large number of logins to various accounts. But rather than directly going in and stealing the money, they used all of these accounts in a short period of time to buy certain stocks, pushing the value up, and allowing themselves to sell large quantities of the stock. Both brokerage houses said they had to cover their customers losses out of pocket, with E-Trade paying $18 million and TD Ameritrade spending $4 million. Both claim they’re trying to make sure this doesn’t happen again, mainly by being able to spot such frauds faster. Still, it is interesting to see how these identity theft scams continue to evolve — and how they’re clearly getting increasingly sophisticated.

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Comments on “Key Loggers Strike Online Brokerage Houses”

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Oliver Wendell Jones (profile) says:

Re: two cents worth

I’m curious as to where you got these numbers?

I find it highly unlikely that the government obtains M-16A1 rifles that cheaply, especially the way they overpay for everything else.

Also, as a 3 year Army veteran, I can personally state that after completing 3 months of basic training, I never again saw or handled a rifle for the rest of my term of service. There wasn’t much need for them in the hospital where I was stationed.

Matthew says:

What are these companies and

why aren’t they (more?) responsible towards these actions?

A teenager sent out one of the first emails regarding “the next great stock” and that company was fined even after they alerted the Stock Exchange that something weird was going on. Even if the culprits are overseas, this money is hardly untraceable is ut?

Solo says:

At this rate of mislabeling things, soon armed robbery and car jacking are going to be called identity theft.

Stealing somebody’s password and using her account is fraud, not identity theft. Stealing credit card numbers and using them is credit card fraud, or plain theft.

Ameritrade and E-Trade are covering for the losses. Credit card fraud is covered except for the first $50 (by law)

Identity theft is having someone impersonating you and typically applying for loans in your name, pocketing the money and leaving you high and dry. Good luck to clear your credit history.

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