Hack, Pump And Dump
Nadia Brannon · 2012
Jeffrey (Jeff) Scott was strongly attached to his Saturday morning routine: coffee, newspaper and the habit of closely following the market. One such day Jeff scanned the statement of his brokerage account and was shocked to find that his balance was reduced to $1,932.54 from $120,000. Jeff was informed that he was a victim of a hack, pump and dump scheme. Hackers who held stocks of China Gold Corporation in their own accounts in Latvia and St. Petersburg compromised his online brokerage account. After an investigation, it was discovered that, in this case, groups of computers had been infected with a spyware program and were used by a herder to perform a number of tasks: login to the Internet brokerage site, guess account numbers, crack passwords, confirm that accounts were active and transfer funds. The lesson learned from this chapter is the Internet is not only making people's world much more efficient and connected, but is also creating exposures to allow criminals to commit fraud that is large in scale and global in nature.