Menu
US authorities extradite Indian on hacking charges

US authorities extradite Indian on hacking charges

Three men allegedly made millions manipulating prices of several stocks, including Google

An Indian man has pleaded not guilty to charges that he hacked into online brokerage accounts in order to manipulate stock prices.

Jaisankar Marimuthu, 34, of Chennai, was extradited to the U.S. from Hong Kong on June 20, making him the latest to face charges in what authorities described as an international "hack, pump and dump" scheme. He entered a not guilty plea in U.S. District Court for the District of Nebraska on June 25, according to court records.

Marimuthu had already been arrested by Hong Kong police on similar charges, the U.S. Department of Justice (DoJ) said.

Another man, Thirugnanam Ramanathan, pleaded guilty to fraud charges stemming from the scheme and was sentenced to two years in prison in September. However, he was deported on Jan. 29, before serving his full sentence, according to Ian McCaleb, a DoJ spokesman.

A third man, Chockalingam Ramanathan, has been charged in the U.S. but is still at large, McCaleb said.

The three were charged two years ago for a 2006 scheme in which they allegedly hacked into online brokerages or created new accounts using stolen identities, then bought and sold stocks in order to manipulate prices to their benefit.

They hacked into more than 60 accounts in nine brokerage firms, including ETrade and TD Ameritrade, according to authorities. One firm lost more than US$2 million because of the scam.

The men allegedly drove up prices of low-volume stocks they owned, such as Acordia Therapeutics, Pacel and IGI, by buying shares with the hacked accounts, then dumping the stocks before the price dropped, authorities said. In October 2006, they also manipulated the price of near-worthless "put" options for Google, which gave buyers the option of selling Google stock for $240 (about half its value at the time), authorities said.

How Marimuthu and his associates allegedly gained access to the brokerage accounts is unclear, but court filings suggest that he may have obtained them from Internet cafés used by American and European visitors to Bangkok. Marimuthu and the others stayed at the Raja Hotel in Bangkok in 2006, prosecutors said.

Wireless networks at hotels and Internet cafés can be a security risk, especially if they are unencrypted or use the cracked Wired Equivalent Privacy (WEP) system to secure network traffic.


Follow Us

Join the newsletter!

Error: Please check your email address.

Featured

Slideshows

Kiwi channel closes 2017 with After Hours

Kiwi channel closes 2017 with After Hours

The channel in New Zealand came together to celebrate the close of 2017, as the final After Hours played out in front of a bumper Auckland crowd.

Kiwi channel closes 2017 with After Hours
Meet the top performing HP partners in NZ

Meet the top performing HP partners in NZ

HP honoured leading partners across the channel at the Partner Awards 2017 in New Zealand, recognising excellence across the entire print and personal systems portfolio.

Meet the top performing HP partners in NZ
Tech industry comes together as Lexel celebrates turning 30

Tech industry comes together as Lexel celebrates turning 30

Leading figures within the technology industry across New Zealand came together to celebrate 30 years of success for Lexel Systems, at a milestone birthday occasion at St Matthews in the City.​

Tech industry comes together as Lexel celebrates turning 30
Show Comments