Fraud Updates 2006
30 October
The U.S. Securities and Exchange Commission has warned that fraudsters are hijacking online brokerage accounts by loading a victim’Äôs computer with a spy program to monitor a user's activities and capture vital information, such as account numbers and passwords. The program then e-mails the stolen information back to the fraudster, who can use it to open victim accounts.
TD Ameritrade Holding on Tuesday became the latest brokerage to confirm the problem. It said it cost $4 million in the third quarter to refund customers whose accounts had been hacked. Harder-hit was rival E*Trade Financial, which last week said its fraud losses ballooned by $18 million in the third quarter from swindlers who stole clients' identities and manipulated their accounts.
TD Ameritrade Chief Executive Joseph Moglia was quoted as saying the $4 million was hit "not material at all. This gets a lot of attention but it's not affecting the share price.
However, experience shows that unless fraudsters and their assets are seized the problem only gets worse. This is a concern where approximately 25 percent of U.S. retail stock trades are made by online investors through roughly 10 million online accounts.
| November 2006 | August 2006 |