The US Securities and Exchange Commission (SEC) has frozen the assets of UK-based trader Idris Dayo Mustapha, alleging that he hacked into the broker systems of US firms to place deals that benefitted his own portfolio.
The SEC complaint, filed in the US District Court for the Southern District of New York, claimed that Mustapha carried out the hacks in April and May.
Once in the firms' systems he placed trades that caused stock prices to rise, according to the filing, before then selling his own shares in the companies for a profit.
The SEC alleged that Mustapha made $68,000 in this way, and cost his victims $289,000 through the trades he placed.
The filing also put an emergency freeze on $100,000 worth of Mustapha’s assets, and prohibits him from destroying any evidence related to the case.
Robert Cohen, co-chief of the SEC Enforcement Division, explained that the SEC's action underlined the department's ability to deal with cyber-based financial fraud.
“We will swiftly track down hackers who prey on investors as we allege Mustapha did, no matter where they are operating from and no matter how sophisticated their technology,” he said.
It is unclear how Mustapha actually hacked into the systems, and the accusations raise questions about the level of security in place at the hacked companies, especially given the importance of the information and assets they hold.
The UK government has constantly played up the risk of cyber threats to big businesses, warning that around two thirds will be hit by a cyber hack this year.
The SEC filing also comes on the same day that Intel Security warned businesses to alert staff to the risk of accepting random requests on LinkedIn as the information gleaned from employees' profiles can be used for highly targeted and damaging phishing attacks.
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