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Indian extradited to US for ‘hack,pump,dump’ scheme

An Indian,who was extradited to the US from Hong Kong on June 20,to face charges in what authorities described as an international “hack,pump and dump”...

An Indian,who was extradited to the US from Hong Kong on June 20,to face charges in what authorities described as an international “hack,pump and dump” scheme,has pleaded not guilty to charges that he hacked into online brokerage accounts in order to manipulate stock prices.

Jaisankar Marimuthu,34,entered a not guilty plea in the US District Court of Nebraska on June 25,according to court records. According to the US Department of Justice (DoJ),Marimuthu had already been arrested by Hong Kong police on similar charges. Another man,Thirugnanam Ramanathan,pleaded guilty to fraud charges stemming from the scheme and was sentenced to two years in prison in September. However,he was deported on January 29,before serving his full sentence,according to Ian McCaleb,a DoJ spokesman. A third man,Chockalingam Ramanathan,has been charged in the US but is still at large,McCaleb said. All three of them were charged two years ago for a 2006 scheme in which they allegedly hacked into online brokerages or created new accounts using stolen identities,then bought and sold stocks in order to manipulate prices to their benefit. Authorities said that they hacked into more than 60 accounts in nine brokerage firms,including ETrade and TD Ameritrade.

The men allegedly drove up the prices of low-volume stocks they owned,such as Acordia Therapeutics,Pacel and IGI,by buying shares with the hacked accounts,then dumping the stocks before the price dropped,authorities said. In October 2006,they also manipulated the price of the near-worthless “put” options for Google,which gave buyers the option of selling Google stock for $240 (about half its value at the time),authorities said.

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First published on: 09-07-2009 at 03:29 IST
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