Criminals have discovered yet another way to steal money. They are combining phishing attacks, Trojan panies whose stocks are pumped and then dumped. horses, and keyloggers to steal identities for use One firm had its stock price go from 88 cents to in investment fraud. The scheme works like this. $1.28 in one day. The following day, the stock fell to Hackers first gain the personal information of legiti- 13 cents, where it remained. TD Ameritrade, an on- mate investors, including names, account numbers, line broker, restricted online trade on the company's passwords, and PINS. These criminals then hack stock. The company's owner had planned to make a into the accounts of unsuspecting investors, selling large acquisition, but the declining stock price can- off their holdings in various companies to purchase celed the purchase. shares in penny stocks. As they buy the penny stocks, the share price increases. (A penny stock is Dump," Washington Post, January 26, 2007; R. Naraine, "Pump a low-priced, speculative stock of a small company.) and Dump Spam Surge Linked to Russian Bot Herders," eWeek, After a short time, the hackers sell the penny November 16, 2006; J. Libbenga, "Pump and Dump Blues," stocks for a profit and transfer the money to off- The Register; November 21, 2006; E. Sutherland, "Fraudsters The fraud affects not only investors, but also com- Sources: Compiled from E. Nakashima, "Hack, Pump, and shore accounts. Update Pump and Dump," Internet News, January 31, 2007. Aleksey Karmardin, for example, used this scheme 14 times to defraud investors of more than QUESTIONS $80,000. He and his accomplices allegedly hacked into four legitimate online trading accounts, sold their holdings, and purchased shares in a penny stock. The stock's price went from 26 cents to 2. How can companies protect themselves from 80 cents in less than one day. The hackers promptly sold the shares and moved the profits to an offshore 3. Should online brokers be held liable for hack, 1. How can investors protect themselves from hack, pump, and dump schemes? hack, pump, and dump schemes? account. pump, and dump schemes? Why or why not?