U.S. Securities and Exchange Commission

Litigation Release No. 20711 / September 9, 2008

Securities and Exchange Commission v. Jaisankar Marimuthu, Chockalingam Ramanathan and Thirugnanam Ramanathan, Civil Action No. 8:07CV94 (D. Neb.)

OFFSHORE HACKER RECIEVES TWO YEAR SENTENCE FOR HIS ROLE IN SCHEME TO INTRUDE INTO ONLINE ACCOUNTS AND MANIPULATE MARKET

The United States Securities and Exchange Commission today announced that on September 9, 2008, U.S. District Judge Laurie Smith sentenced Thirugnanam Ramanathan, a native of Chennai, India, and legal resident of Malaysia, to serve two years in prison, followed by 3 years of supervised release, and ordered him to pay restitution in the amount of $362,247. Ramanthan was arrested in Hong Kong and extradited to the United States on May 25, 2007. On July 2, 2008, Ramanathan pleaded guilty to one count of conspiracy to commit wire fraud, securities fraud, computer fraud and aggravated identity theft.

In January 2007, Ramanthan was indicted by a federal grand jury in Omaha along with his brother Chockalingam Ramanathan and Jaisankar Marimuthu, also residents of Chennai. Marimuthu and Chockalingham 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. Marimuthu is currently being detained in a Hong Kong prison awaiting extradition to the U.S. following his conviction there on similar offenses but related instead to the Hong Kong stock market. Chockalingam Ramanathan remains at large.

On March 12, 2007, the SEC filed a complaint in the United States District Court for the District of Nebraska charging all three Indian nationals with participating in a fraudulent scheme to manipulate the prices of at least fourteen securities through the unauthorized use of other people’s online brokerage accounts.

The Commission’s complaint alleges that, between July and November 2006, Jaisankar Marimuthu, Chockalingam Ramanathan and Thirugnanam Ramanathan hijacked the online brokerage accounts of unwitting investors using stolen usernames and passwords. Prior to intruding into these accounts, the Defendants acquired positions in the securities of at least thirteen issuers and options on shares of another issuer. Then, without the account holders’ knowledge, and using the victims’ own accounts and funds, the Defendants placed scores of unauthorized buy orders at above-market prices. After these unauthorized buy orders were placed, the Defendants sold the positions held in their own accounts at the artificially inflated prices netting unlawful trading profits of at least $121,500. These transactions created the appearance of legitimate trading activity and pumped up the share price of the fourteen securities.

The Commission’s action charges the Defendants with violations of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and seeks permanent injunctive relief, disgorgement and civil money penalties.

The Commission’s Office of Investor Education and Assistance has previously issued an investor alert, available on the Commission’s website, which provides tips to avoid becoming a victim of online intrusions. See http://www.sec.gov/investor/pubs/onlinebrokerage.htm.

For more information, see Litigation Release No. 20037.

http://www.sec.gov/litigation/litreleases/2008/lr20711.htm