Californian hacker taps into US brokerage loophole

I was mildly amused to hear that US brokerage houses are crying fraud after a Californian man managed to extract more than $50,000 by opening thousands of online brokerage accounts in recent months.

It seems that US online brokerages test users' bank accounts by making small deposits of under a dollar, both to verify the users' bank account details and, of course, to verify their identity.

I remember that some early online e-cash accounts in the UK used a similar strategy, but I digress.

Mike Largent used an automated script to open around 58,000 online accounts with various brokerages - many of them in the names of cartoon characters - and pooled the resultant deposits.

Largent now faces 13 counts of computer, mail and wire fraud. He's out on bail and is scheduled to appear in court on June 19th.

I think the brokerages should thank him for highlighting their obvious loophole.

Have a good weekend everyone...