Three charged over online stock scam

US federal authorities have charged three men with hacking into online brokerage accounts and using the proceeds to manipulate the stock of Google, Sun Microsystems and 12 other companies.

Indian nationals Jaisankar Marimuthu, Chockalingam Ramanathan and Thirugnanam Ramanathan were arrested and indicted on multiple counts, marking the first time an arrest and federal charges were made in an online brokerage account intrusion case.

The men allegedly took positions in 14 stocks and then hacked into online US brokerage accounts between July and November 2006. Using the victims' own account funds, the defendants allegedly pumped up the market for those shares and then dumped them, accumulating profits of more than $121,500. The brokerages subsequently suffered damages of more than $875,000 for the compromised accounts.

The indictment was unsealed on Monday in a Nebraska federal court. Marimuthu and Chockalingam Ramanathan were charged with one count of conspiracy, eight counts of computer fraud, six counts of wire fraud, two counts of securities fraud and six counts of aggravated identity theft. The third person in the case, Thirugnanam Ramanathan, was charged with one count of conspiracy, two counts of computer fraud and two counts of aggravated identity theft.

Marimuthu was arrested in late December by Hong Kong police under charges including computer fraud and money laundering. Thirugnanam Ramanathan was arrested by Hong Kong authorities in late January under a US provisional arrest warrant. Chockalingam Ramanathan is still at large.

The Securities and Exchange Commission filed a civil complaint in the case, seeking a preliminary and permanent injunction, disgorgement of illegal proceeds and monetary damages. The SEC has filed four account intrusion cases since December, involving defendants in Estonia, Latvia and now Hong Kong and Malaysia.

Dawn Kawamoto writes for CNET News.com