Beware of phony stock traders stealing information

Scam Watch

June 08, 2008|By Dan Thanh Dang

Watch out for stock traders posing as employees of a made-up Latvian brokerage firm on the popular classifieds Web site Craigslist.

The phony firm appears to have stolen personal information from individuals who thought they were applying for a job through Craigslist, according to the Financial Industry Regulatory Authority. A complaint filed by the Securities and Exchange Commission says the traders used the job applicants' Social Security numbers, dates of birth and other information to open up online brokerage accounts.

Applicants were told by e-mail or fax that the firm would use the personal data to conduct background checks, FINRA says. Once the background checks were completed, individuals who were "hired" were told the firm would send funds to their personal bank accounts using wire transfers from Russian bank accounts and a Western Union money order.

The hired individuals were instructed to wire the funds from their bank accounts to specific account numbers that corresponded to brokerage accounts opened with their personal data, but without their knowledge.

FINRA says the firm also used stolen user IDs and passwords to gain unauthorized Internet access into any existing, legitimate brokerage accounts of unsuspecting victims. Using those accounts, the traders traded and manipulated the prices of a number of thinly traded stocks to make a handsome profit.

To protect yourself, FINRA says to be suspicious of anyone asking for your personal data; know whom you're doing business with by verifying companies through state and federal regulatory agencies; don't respond to e-mails requesting personal data; and ask detailed questions about why such data are needed.

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