SEC pounces on ID fraudsters

Risk staff
01 May 2008

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Regulation

WASHINGTON, DC - The US Securities and Exchange Commission (SEC) has shut down an account hijacking scam that had conned victims out of $66,000 in seven weeks. The identity thieves used a fictitious Latvian brokerage, AWE Trading, and a web-advertised job advertisement that fooled respondents into providing social security numbers, dates of birth and personal information. The fraudsters used this information to open online securities trading accounts at US firm Interactive Brokers.

During seven weeks in March and April 2007, fraudsters hacked into customer accounts at retail brokers to purchase 18 New York Stock Exchange and Nasdaq listed securities. The fraudsters simultaneously bought and sold the securities and profited from changes in trading volume and stock prices.

The account funds were frozen by Interactive brokers in April 2007.

The SEC has filed a lawsuit to penalise the fraudsters and repatriate stolen funds transferred to overseas accounts.

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