A couple of weeks ago, I did a post on “Cyber Crooks Targeting Online Brokerages.” Now more information is being released on this latest financial crimes target.

Courtesy of Linda Epstein at Blogging Stocks:

“E*Trade reported on a conference call last week that it spent $18 million in the third quarter to compensate customers affected by trading fraud, according to a report from Bloomberg. TD Ameritrade also admitted to losses, but gave no numbers. We may get more details when it reports its numbers, expected later today. Charles Schwab told Bloomberg that it didn’t see “anything unusual enough to warrant a financial disclosure.” Well, if I were a Schwab customer and my account were infiltrated, I certainly would consider it important enough for disclosure. I hope Schwab is being more candid with its customers. Fidelity did not comment on Bloomberg’s story.”

Blogging Stocks article, here.

InformationWeek did another article with good information about this, here.

According to the articles, accounts are being used in “pump and dump” schemes after personal computers are compromised with crimeware.

Wikipedia describes a “pump and dump” scheme as “a term used to describe a form of financial fraud that typically involves artificially inflating the price of a stock or other security through promotion, in order to sell at the inflated price (creating artificial demand).”

The InformationWeek article, also mentions that money is being stolen directly from accounts.

It seems that some of the brokers are disclosing their problems and some aren’t. Thus far, victims are being compensated, however (in reality) fraud costs are normally passed on to the consumer.

Corporations aren’t in business to lose money.

The InformationWeek article mentions law enforcement’s frustration that a lot of these incidents aren’t reported, or are being “underreported.”

They also mention that only a “handful” of States have laws on the books to address “phishing” and that our legislators can’t agree on a Federal law.

Until we enact the necessary legislation and give law enforcement “full cooperation,” the criminals behind this will be “laughing all the way to the bank.”

Be Sociable, Share!