A while back you would hear stories about people who had their online brokerage accounts cleaned out by identify thieves–stocks sold and the proceeds funneled to God knows where through a maze of banking transactions. Then brokerage firms countered by making it more difficult to remove cash and offered more alerts to customers about account activity.

As usual, the criminals adapt and find new chinks in the armor. Because they’re having a harder time removing funds from accounts, they’ve moved on from that. The latest scam to target online brokerage firms and their customers involves a twist on the classic pump and dump scam.

What they’re doing now is using their own money to purchase thinly traded stocks. Then, they sell all of the holdings in accounts they’ve managed to steal passwords for and use the proceeds to purchase the other stocks they own, driving up the prices. Once the prices have gone up sufficiently, they sell their holdings to make a nice hefty profit. Then, the poor sap whose account they hijacked goes online and sees that his retirement portfolio is now 100% invested in a penny stock he has never heard of. Yikes! The worst part is that since the thief has unloaded their large holdings, the penny stocks have now likely dropped significantly in value, leaving the owner of the brokerage account with heavy losses.

It’s really quite a clever scam. You have to wonder what these fraudsters could accomplish if they directed that creativity into legitimate ways of making money.