Pump and Dump Version 2.0

I recently read on article about this vast underworld in cyberspace. It turns out that information systems containing the worlds data …and precious financial data are not the only things becoming more advanced, but so are the methods of hacking into them. It’s a world that’s as devious as the more sinister underbelly of society that has become infamous thanks to Hollywood. Ransom schemes, credit card information; which by the way is sold for as low as one dollar a piece, “fencing” items over chat rooms…it’s all happening right under our noses. Not to mention the so called credit card dumps acting like a techie version of the weapons trade. These networks are highly mobile, moving around about every six months. And the funny thing is that these guys are using things like Pay Pal to close out their transactions.

But of particular interest at least to this forum is not the viruses or “malware” being created and sold as if it were a commodity, and it’s not to focus solely on the technological aspect, but rather the way in which this is changing finance. Take young, bright criminals, and add a whole array of high tech tools and your get a new way to commit crimes. Remember the old “pump and dump” scam; think you know what it’s about…well think again.

Hackers are breaking directly into online brokerage accounts and liquidating entire portfolios…after they have made a bundle of course. After buying a ton of shares using compromised funds on E-trade or Ameritrade they manage to artificially raise the stock price and then sell of their shares to the surprise of other investors who in turn experience a sharp drop in the price. What looks legitimate is actually a scam so be careful. The question is how you stop it. You can’t. At least not right away. Last year E-trade reported an 18 million dollar loss in its third quarter due to similar scams. It’s not like you can stop everyone from trading. How then do you stop the fraudulent accounts being created every day? Or do you just learn to live with it as Marc Gaffan, director of marketing for the RSA points out? I know the secret service is on the job, but what are the result that we can expect?If you want to learn more try and take a look at the whole article < http://www.informationweek.com/story/showArticle.jhtml?articleID=197004939>.