March 12 (Bloomberg) -- A U.S. grand jury indicted three Indian citizens for allegedly manipulating securities prices for Google Inc. and at least eight other companies by hacking into online brokerage accounts.

Federal prosecutors said the men bought stocks and options, then hijacked online accounts to purchase the same securities and drive up the prices. At least 60 customers and nine brokerages were victims, including TD Ameritrade Holding Corp and E*Trade Financial Corp. One firm lost more than $2 million, the prosecutors said.

The indictment, unsealed today in Nebraska, is the first federal criminal case in a growing probe of Internet-savvy criminals who steal people's account numbers to manipulate stocks. The U.S. Securities and Exchange Commission has lodged three similar suits since December, targeting defendants from Latvia and Russia to Florida and the British Virgin Islands.

``This is the old pump-and-dump scheme taken to a new level,'' said Alice Fisher, chief of the Justice Department's criminal division in Washington. ``This is certainly a problem we are alert to.''

The government is investigating similar cases involving the abuse of online brokerage accounts, she said.

The grand jury indicted Jaisankar Marimuthu, 32, and Chockalingam Ramanathan, 33, residents of Chennai, India, and Thirugnanam Ramanathan, 34, a native of India and resident of Malaysia. The charges, including securities fraud, computer fraud and conspiracy, were issued last month in U.S. District Court in Omaha, Nebraska, where TD Ameritrade is based.

Hong Kong Arrests

Hong Kong police arrested Marimuthu on Dec. 20 on local charges similar to the U.S. indictment, prosecutors said. Thirugnanam Ramanathan also was arrested in Hong Kong on Jan. 26 under a U.S. warrant. Chockalingam Ramanathan is at large.

The U.S. plans to extradite both men and bring them to Nebraska. Their attorneys couldn't be located for comment.

According to court papers, the men opened online brokerage accounts in their own names at several different firms. They mostly invested in companies with thinly traded shares and then broke into other investors' accounts, buying the same stock.

For example, two of the defendants bought about 32,450 shares of Acorda Therapeutics Inc. last August at prices ranging from $2 to $3.29 a share, according to charging documents. Then they hacked into an account at TD Ameritrade, using it to buy 26,000 Acorda shares, which boosted the stock's trading volume to more than nine times its 15-day average. The men then sold most of their stock, earning $21,762 in profit.

SEC Suit

The ring also targeted customers of Charles Schwab Corp., Merrill Lynch & Co. and Fidelity Investments, the SEC said in a separate civil lawsuit filed against the men today. The regulator accused them of trying to manipulate at least 14 securities, including shares of Sun Microsystems Inc. and Investors Capital Holdings Ltd.

When it came to Google, operator of the Internet's most-used search engine, federal authorities said the men manipulated so- called put options, which are contracts that convey the right to sell a security at a set price within a certain period.

The SEC attorney overseeing the case said it is the first of its kind to involve a company as large as Google. Most ``hack, pump and dump'' cases focus on shares of small companies.

``These schemes can be orchestrated from just about anywhere on the planet,'' SEC attorney John Reed Stark said.

Google's shares were worth more than $427 on Oct. 13 when the men began buying thousands of then-worthless December options, granting the right to sell the stock for $240, the SEC said. Though the options would be worthless unless Google's share price fell 44 percent, the men reaped more than $32,000, selling the contracts to hacked accounts, the SEC said.

To contact the reporter on this story: David Scheer in Washington dscheer@bloomberg.net.

Last Updated: March 12, 2007 18:01 EDT