Market Manipulation by Foreign Cyber Crime Rings

"Concerted rings" located in Eastern Europe and Asia have been identified as the perpetrators of complex market manipulating fraud schemes. The schemes involve criminals gaining access to individual brokerage accounts, or opening accounts with stolen identities. One permutation involved using compromised accounts to buy up shares of infrequently traded stocks to inflate their value, and then selling shares of the stock the criminals owned in their personal accounts that had been purchased at a much lower price. Effectively, the criminals are transferring money out of the owners account without any flags going up at the brokerage house.

Another scheme involved using accounts that had been opened with stolen identities to conduct illegal market transactions. By doing so, the criminals avoid detection, and worse yet, implicate innocent individuals in the crimes that were committed with their stolen identities. The problem is severe, costing Americans billions of dollars. With each advance that brokers make in detecting and preventing this form of white collar crime, the criminals find complex new ways to cheat consumers out of their money.

Source: Bloomberg