Three men from India have been arrested on suspicion of hacking into US stock brokerage accounts in order to boost the value of their shares, the US Justice Department said yesterday.

The trio were charged with computer fraud, conspiracy and identity theft after an alleged “hack, pump and dump” plot to drive up share prices, which cost one brokerage firm at least $2 million (£1 million) in losses.

The three suspected hackers are Jaisankar Marimuthu, 32, Thirugnanam Ramanathan, 34 and Chockalingam Ramanathan, 33. Two of the men were arrested in Hong Kong last week, while Chockalingam Ramanathan is still at large.

The group allegedly coordinated the scam from Thailand and India, and bought the stocks with accounts under their real names. They then used stolen identities to pose as other online stock traders and purchased the shares at inflated prices, driving the value of their stock up. The trio then sold their own shares at the exaggerated price during a four-month spree last year, the department said in a statement.

The case marks the first time men suspected of hacking into and defrauding US-based online brokerage firms have been seized overseas, according to the Justice Department.

“This case demonstrates our commitment to aggressively investigate and prosecute these schemes wherever they originate,” said assistant attorney general Alice Fisher. “These new forms of high-tech identity and securities fraud pose serious risks to investors and brokerage firms across the globe.”

The Securities and Exchange Commission (SEC) has filed civil charges against the men and claims that they made profits of more than $121,500 (£63,000). The US authorities will seek the extradition of the detained men to face the charges.