High-tech crooks are hijacking online brokerage accounts using spyware and operating from remote locations, sometimes in Eastern Europe, market regulators were quoted by Reuters as saying.
The computer 'incursions' are a growing problem, said Walter Ricciardi, deputy enforcement director at the Securities and Exchange Commission.
'It's something we're very concerned about,' he said in remarks at a legal conference in Washington.
About 25% of retail stock trades were made by online investors through roughly 10 million online accounts, according to brokerages regulator NASD, the report said.
Crooks would load a victim's computer or a public PC with a spy program to monitor a user's activities and capture vital information, such as account numbers and passwords, the report said.
The program would then e-mail the stolen information back to the thief, who could use it to open victim accounts, the report further said.
Once inside, Ricciardi said the thief might sell off an account's portfolio and take the proceeds. Electronically hijacked accounts might also be used for 'pump-and-dump' schemes to manipulate stock prices for profit.Public computers in such places as Internet cafes and hotel rooms were especially vulnerable to incursions, the report said, although home computers might also be hit as spyware could be imported simply by opening an e-mail attachment, according to John Stark, chief of the SEC's Office of Internet Enforcement.