Three men charged with hacking brokerage accounts

NEW YORK (CNNMoney.com) -- The Securities and Exchange Commission charged three men Monday with hacking into U.S.-based online brokerage accounts, primarily from Thailand and India, and manipulating stock prices to turn a profit for themselves.

The civil charges, brought in a Nebraska federal court, claim the men allegedly used stolen identity information to pose as online buyers, inflate the value of the stock, and then sell their own shares at a higher price.

In a related action, the U.S. Department of Justice also indicted the men on federal charges for allegedly pumping up stock values to make a large profit.

The Justice Department said an estimated 60 customers and nine U.S. brokerage firms were tricked during a four-month period last year, with one brokerage estimating a loss of nearly $2 million.

The 23-count indictment includes computer fraud and conspiracy charges, which each carry a maximum of five years in prison; along with wire fraud and securities fraud, each with maximum sentences of 15 to 20 years; and aggravated identity theft, with a maximum of two years in prison.

Between July and November 2006, the defendants gained positions in the securities of at least 14 securities, including Sun Microsystems (up $0.04 to $6.31, Charts), according to the SEC. The defendants also allegedly acquired options on Google (up $1.79 to $454.75, Charts) shares, betting that the stock price would fall.

Two of the three men, Jaisankar Marimuthu and Thirugnanam Ramanathan, were recently arrested in Hong Kong, while Chockalingam Ramanathan is still at large.

"This is the fourth case that the Commission has brought since December, and more than anything else, it demonstrates our commitment to bringing even foreign fraudsters to justice here in the U.S.," Cheryl Scarboro, associate director of the SEC's Division of Enforcement, said in a statement.

Pump-and-dump scams hit brokerages

New computer virus threatens biz nets