Posted By: Margaret Pozzini

Fri Oct 13, 2:32 PM ET

WASHINGTON (Reuters) - High-tech crooks are hijacking
online brokerage accounts using spyware and operating from
remote locations, sometimes in Eastern Europe, U.S. market
regulators said on Friday.
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The computer "incursions" are a growing problem, said
Walter Ricciardi, deputy enforcement director at the U.S.Securities and Exchange Commission.

"It's something we're very concerned about," he said in
remarks at a legal conference in Washington.

About 25 percent of U.S. retail stock trades are made by
online investors through roughly 10 million online accounts,
according to brokerages regulator NASD.

Crooks will 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 program then e-mails the stolen information back to the
thief, who can use it to open victim accounts.

Once inside, the thief may sell off an account's portfolio
and take the proceeds. Or electronically hijacked accounts may
be used for "pump-and-dump" schemes to manipulate stock prices
for profit, Ricciardi said.

Public computers in such places as Internet cafes and hotel
rooms are especially vulnerable to incursions. But home
computers may also be hit as spyware can be imported simply by
opening an e-mail attachment, said John Stark, chief of the
SEC's Office of Internet Enforcement.

Incursion scams under SEC investigation are far-flung.
"We're seeing these frauds in offshore entities and persons,
including those located in Eastern Europe," Stark said.

The SEC is working to track down the hackers and to educate
online investors, he said.

Steps to fight incursions include securing an online
account by changing passwords frequently and never using an
unfamiliar computer to enter an account number or password.

To fight a similar problem, U.S. banks are exploring new
online banking security technologies since a study showed
identity theft via online banking is a fast-growing crime.

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