teen charged for hacking online brokerage

  1. 6,447 Posts.
    source: yahoo.com

    US teen charged with securities fraud
    Thu Oct 9, 2:13 PM ET

    By Adrian Michaels in New York

    Federal regulators scored another first for the electronic age on Thursday, arresting a 19-year-old living with his parents in Pennsylvania in the first case involving a combination of securities fraud, computer hacking and identity theft.

    The alleged behaviour of Van Dinh is a cautionary tale for all internet traders. Officials say he limited his own internet trading losses by tricking another home trader into downloading software, which Mr Dinh then used to steal log-in and password information for an online brokerage account.

    Mr Dinh, enforcement officials say, then signed in to the brokerage, buying up most of his own loss-threatening trading positions and saving $37,000. He was arrested on Thursday and charged with fraud by the US Attorney's office in Massachusetts, part of the Department of Justice (news - web sites).

    The Securities and Exchange Commission (news - web sites) brought a related civil case on Thursday. John Reed Stark, SEC's head of internet enforcement, said: "This case should remind all investors using the internet to review their brokerage statements carefully every month, to check the bona fides of any potential download and to take security measures."

    Mr Dinh, it is alleged, bought options in Cisco Systems that would have made a profit if the shares had fallen below $15 within a certain period.

    As Cisco's stock stayed above $15 and the deadline approached, he went online using an alias to a share traders' forum and elicited e-mail addresses from some users of the web site. Using a different alias, he then sent e-mails offering free share-tracking software.

    When one person downloaded the programme, he unwittingly downloaded instead "The Beast" - software that allowed Mr Dinh to monitor his victim's every keystroke. That revealed log-in and password information for an account at the TD Waterhouse brokerage.

    However, regulators caught the alleged fraudster quickly. Mr Dinh's victim complained when $47,000 went missing from his brokerage account. "When [Mr Dinh] logged into TD Waterhouse from home," Mr Reed Stark said, "he left an internet trail in spite of his aliases. We knew right away that the trades were made from his home address."

    Mr Dinh is now taking an enforced break in his studies. Mr Reed Stark said the accused was taking a business course at Pennsylvania's Drexel University.

arrow-down-2 Created with Sketch. arrow-down-2 Created with Sketch.