Agile Ali

SEC: Hacker Manipulated Stock Prices – or The one who got caught

I personally feel that either this guy was ratted out, or the SEC is going after him because he is a small timer. All the big companies play games with their stock prices, heck even big investors are playign games with their stocks. But since they are too big of a fish to catch, SEC realizes that going after them not worth the lawyer fees and time, so it and continues to catch the small ones to paying their lawyers the salaries. __ My 2 cents __ Ali

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U.S. regulators are moving to freeze the assets and trading accounts of a Russian accused of hacking into personal online portfolios and manipulating the price of dozens of stocks listed on the Nasdaq Stock Market and New York Stock Exchange.

A New York federal judge on Tuesday sided with the Securities and Exchange Commission and froze the assets of Broco Investments, believed to be a one-trader operation based in St. Petersburg, Russia. The SEC said Broco capitalized by artificially moving prices of more 38 thinly traded securities — enabling Broco to profit from up-or-down price swings.

“These transactions have created the appearance of legitimate trading activity and have artificially affected the prices of at least 38 issuers,” (.pdf)  the Securities and Exchange Commission said in court filing.

The so-called “hack, pump and dump” scheme is among the latest illicit methods of gaming the market though hacking.

An Indian man was sentenced to two years in prison for undertaking a similar scam in 2008. That same year, a Ukrainian hacked into Thomson Financial to get a peek about an upcoming negative earnings report for IMS Health, earning nearly $300,000 for a few minutes’ work.

And in July, a computer programmer working for Goldman Sachs was arrested on charges  he stole proprietary source code for software his employer uses to make sophisticated, high-speed stock and commodities trades.

In the latest case, the affected stocks ranged from Akeena Solar, Magellan Petroleum to Xerium Technologies. The prices fluctuated more than 20 percent in some instances.

Broco would purchase these and other stocks in its own portfolio and immediately place unauthorized buy orders at inflated prices of the same securities in hacked Scottrade accounts, the SEC said.

“Immediately or shortly thereafter, the defendants capitalized on the artificially inflated share prices of the targeted securities by selling the shares previously acquired in their account,” the SEC alleged. “In other instances, the defendants profited by covering short positions previously established in their account while placing unauthorized sell orders through the compromised accounts at substantially lower prices.”

Along the way, victims lost $600,000 in market value the last few months alone, the SEC said. And Broco, believed to be a one-person company run by Valery Maltsev, reaped $255,000 in ill-gotten gains during the same time.

Daily trading volume in Pennsylvania-based financial services company AmeriServe Financial averaged about 11,300 shares in from Dec. 1 to Dec. 20, the SEC said. The next day, volume increased 20 times. At least 200,000 shares were bought and sold through Broco or hacked Scottrade accounts, allowing Broco to leverage the prices for its own profits.

“Broco grossed $141,500 in approximately 15 minutes,” the SEC said.

[via Wired]

Warning! Warning! Pink Mal-ware Rabbit Approaching!

The U.S. Department of Homeland Security found software for Energizer’s Duo USB battery charger can leave computers vulnerable to attack.

The Duo battery chargers for NiMH batteries are safe, but the software that enables the user to monitor the batteries is infected, PC World reported Monday.

The infected software includes a “backdoor” that allows some computer files to be to be remotely controlled, PC World said.

The trouble begins if the consumer downloads Windows software from the Energizer company website If this was not done or if the consumer uses a Macintosh computer, consumer files are safe.

Consumers were advised to uninstall the infected software, reboot the computers and then go to the System32 directory in Windows. There, consumers were advised to delete “arucer.dll,” the file that is the actual backdoor, PC World said.

Energizer has discontinued the software, but you can still buy the DUO at Amazon for about $20.

How Facebook QA/Tests its code !

Last week, Facebook was affected by a glitch that sent what appear to be thousands of private messages to the wrong people — a very alarming security breach given the amount of data 400 million users have entrusted to the service. News of the bug hit the press, Facebook issued a typically vague statement saying very few people were affected and that an investigation was looking into the matter, and that was that.

Most people probably just shrugged their shoulders at the news, but it’s yet another blemish against the company’s security record. This isn’t the first time Facebook has run into security issues, and I’ve grown increasingly concerned that the company might be playing fast and loose with its quality assurance policies because it doesn’t want to sacrifice the rapid iteration it’s famous for.  With this in mind, I reached out to Facebook late last week to ask about their protocol for deploying code and how the bug made it through in the first place. The company responded to some of my questions, and refused to answer others. More »