Trading Firm Sues Russian Hacker

     MANHATTAN (CN) - A Russian hacker broke into online brokerage accounts and stole hundreds of thousands of dollars from its customers in a "hack, pump and dump" scheme, Scottrade claims in Federal Court. Defendant Valery Maltsev responded in a statement that said, in part: "Scottrade investors didn't even see that money were going away from their accounts, they were not noticing that for six months! I can't understand that."
     In March, the SEC sued BroCo Investments, a Mauritius corporation, and its owner, Maltsev, claiming they looted more than a quarter of a million dollars from investors.
     The SEC accused Maltsev, 36, of establishing a position in a company's shares, then driving up the price by "hijacking" account information from online investors. In a matter of 20 minutes, Maltsev placed orders through the hacked accounts at above- or below-market prices, the sold off his own positions at a profit, the SEC said.
     Scottrade, an Arizona-based company operating in St. Louis, is also suing Genesis Investments, where Maltsev allegedly maintained his own investment accounts.
     When Scottrade discovered the intrusion into its customers' accounts, it says, it spent $1.2 million to restore the tampered-with accounts.
     After the SEC filed its complaint, Maltsev released a statement denying the allegations.
     "Scottrade investors didn't even see that money were going away from their accounts, they were not noticing that for six months! I can't understand that," Maltsev said in the statement. "And if SEC will not conduct an investigation on this case, Broco will. We should find the truth. And I'm not going to even think about covering those losses until the investigation is done."
     Nonetheless, Scottrade seeks rescission, a temporary restraining order and damages for securities violations. It is represented by Howard Rhine with Feder Kaszovitz.