An online investor has been sentenced to 13 months in prison for using a Trojan Horse program to hack into a third party brokerage account and purchase his own expiring stock options.
The US Securities and Exchange Commission (SEC) filed charges against Van Dinh, 20, last October. He is the first person to be prosecuted by the SEC on computer hacking and identity theft charges.
During July 2003 Dinh sent an e-mail inviting users of an online stock discussion forum to test a new stock-charting tool. The tool was actually a disguised version of a keystroke-logging program, 'The Beast', that would enable Dinh to monitor remotely the computer activity of any users who had downloaded it.
Dinh used the Trojan Horse program to access the online TD Waterhouse brokerage account of a Massachusetts investor and placed buy orders for options contracts for Cisco Systems that corresponded to sell orders he previously placed through his own brokerage account. As a result, the victim unknowingly purchased 7200 Cisco option contracts, at $5 per contract, that expired worthless eight days later.
In February, Dinh pleaded guilty in a federal court in Massachusetts to unauthorised access to a protected computer and securities fraud and repaid the victim's lost $47,000.