The US Justice Department have charged three Indians with securities fraud, computer fraud and identity theft in a million-dollar scam, accusing them of hacking into US stock brokerage accounts so that they could boost the value of their shares.

The three culprits are Jaisankar Marimuthu and Chockalingam Ramanathan, both residents of Chennai, India while Thirugnanam Ramanathan is an Indian who lives in Malaysia. According to reports, Marimuthu and Thirugnanam Ramanathan were arrested in Hong Kong, and Chockalingam Ramanathan is still being sought.

It is the first time that suspected hackers involved in an alleged share-trading scam have been arrested abroad, the Justice Department said. "Today's case demonstrates our commitment to aggressively investigate and prosecute these schemes wherever they originate," said Assistant Attorney General Alice Fisher adding "These new forms of high-tech identity and securities fraud pose serious risks to investors and brokerage firms across the globe."

US authorities allege that the three men operated mainly from Thailand and India. Their modus operandi was to buy thinly-traded stocks through the US brokerage firms under their own names, that allowed them to boost prices more easily and with fewer trades in what the authorities called a "hack, pump and dump" scheme.

They then used stolen identity details to pose as other online stock traders and bought the shares at inflated prices, pushing up the value of their holdings.

One brokerage lost more than $2m, and the plot affected about 60 brokerage clients and nine firms including Ameritrade, E-Trade, Firstrade, Choicetrade, Tradeking, Terranova and OptionsXpress, the Justice Department claimed.

The Securities & Exchange Commission - SEC has filed civil charges against the culprits and claims that they made profits of more than $121,500.

By RTTNews