Slashdot Mirror
SEC Takes Action Against Latvian Hacker
wiredmikey writes "The SEC has filed charges against a trader in Latvia for conducting a widespread online account intrusion scheme in which he manipulated the prices of more than 100 NYSE and Nasdaq securities by making unauthorized purchases or sales from hijacked brokerage accounts. The SEC also went after four online trading firms and eight executives who are said to have helped the hacker make more than $850,000 in ill-gotten funds. The SEC's actions occurred on the same day that the Financial Industry Regulatory Authority (FINRA) issued an investor alert and a regulatory notice about an increase in financially motivated attacks targeting email."
Now, all of you other big smartie investor types, quit falling for phishing scams!
Home of The Suki Series
Two of the associates working for two of the named firms agreed to settle for $35,000 each in fines.
And the SEC wonders why people keep doing this sort of thing. I bet those two guys (and many other not charged) walked away with millions.
SJW: Someone who has run out of real oppression, and has to fake it.
It was really clear to me how he was precisely doing this for his own gain but here's a PDF of the 15 page court proceedings that goes into detail (section B is the informative part). Essentially within one single trading day he would establish a long or short position through one of the unregistered trading firms. Then in that day he would gain illegal access and, if he had to, sell securities to beef up the cash in the account and then make trades that would cause his long or short to payoff. Then he'd pull it all out from the original account. He would often complete this cycle in 15 to 20 minutes and, as a result, he'd often be responsible for more than 50% of that stock's trading volume for that day. It's interesting, they go in to the details of a GBX stock and how the price changes are 10 to 50 cents (on ~$10 per stock).
My work here is dung.
And the SEC wonders why people keep doing this sort of thing. I bet those two guys (and many other not charged) walked away with millions.
According to the court filing:
Nagaicevs generated more than $850,000 in illegal profits from this scheme. His unauthorized trading in the hijacked accounts also caused losses in excess of $2 million which were reimbursed by the broker-dealer firms that carried the victimized customer accounts.
So how did the firms that the associates work for 'walk away with millions' when Nagaicevs got $850,000 and the total losses to the accounts was over $2 million? I'm guessing that since the firms that those associates worked for reimbursed those accounts that those two associates are facing some pretty upset employers. Is that really worth a couple hundred thousand?
My work here is dung.
Good job by a fellow Latvian. :) He was just taking back that was illegitimately taken from us in the global financial crises. Latvia has already suffered too much, GDP fell 30% and unemployment reached 20%. It is time to reverse this trend and help us, 99%.
Any basic pattern matching would show that this guy always bought tons of shares and sold tons of shares right around the hacked account buying tons of shares. How could you be intelligent enough to pull this off but so dumb as to create an easily traceable pattern?
So when are they going to investigate the actual definition of a pump and dump scheme ran by NIA, everything that they do, from Agria Corp (GRO) and Mega Precious Metals (MGP:CN) and now to Broadvision (BVSN)? They had plenty of notifications on this, it doesn't bother them or are they in on it?
You can't handle the truth.
Why the fuck are they concentrating on arresting hostmasters in New Zealand when this kind of actual, real THEFT is happening?
If they can get New Zealand authorities to arrest over imaginary property, they can fucking get Latvian authorities to arrest over real money!
(And, in fact, I don't think they should be doing either; but if they're going to do either of them, chasing real money and real crimes should be the more important one.)
Roarin' like a mouse, bitin' like a flea!
Caught off-guard by the SEC's sudden action, the Pac-10 is now preparing suits against hackers in Lithuania and Estonia, which is likely to set off a chain of events that will leave the Big East foraging for hackers in Ghana and Ivory Coast.
All shall crumble before the power of DOOM.
Oh, wow am I not impressed. They investigate, and nab, a hacker who caused a loss under a million bucks, while remaining virtually asleep at the wheel as SEC associates, flash traders, big time insiders and other "better positioned" criminal psychopaths virtually decimate our economy.
Everything and its opposite is true. Get used to it.
...and thought Doc Doom had really fallen on hard times.
Why is it allowed at all. And how is it good for me ?
Somebody is making goods and selling them - OK.
Somebody needs goods and is paying for them - OK
Somebody stores goods and transports them - OK
Somebody has shop - where people can come and buy goods in small quantities - OK
And now - Somebody does not need goods, does not have ability to store it.Somebody only needs money.
He is playing a game with goods - buying and selling. Does not even know where goods are, and how goods are made, and what goods are for.
He is simply trying to get money from other people work.
How can this be good for me ?
Madoff. One word suffices. He was detected a decade before he finally took himself down, and the SEC went out of their way to not investigate. Why? Because he was an insider. The only reason he was caught was that the market went down, and his investors started needing their money. The SEC only got wise after it was far too late.
Enron. Again, only one word is needed. They were cooking the books for many years before they folded. Once again the SEC was asleep at the switch, and only found out when it was far too late.
Long Term Capital Management. Not as well known as the others, and somewhat earlier, it was the prototype of the modern trading failure and bailout. http://en.wikipedia.org/wiki/Long_term_capital_management They got in way over their head with too much leverage and had to be bailed out by the US government. No lessons were learned.
The current world wide recession/depression. The greed and stupidity of Wall Street is at least as great as it was before the depression of the 1930's. All of the structures put in place as a result were negated, and the SEC led the way. Harvey Pitt http://en.wikipedia.org/wiki/Harvey_Pitt#Criticism Donaldson http://mobile.businessweek.com/magazine/destruction-at-the-sec-09012011.html and Cox http://seekingalpha.com/article/96487-5-failures-of-sec-chairman-cox all sat around with their thumbs in their butts while the biggest fraud in the history of the world was in progress. They all had their marching orders, which was to do absolutely nothing to rock the boat, and they did exactly what they were told.
(Not that the SEC is doing a better job at the current time. The current focus on insider trading is like writing parking tickets while a riot is in progress. It is a deliberate attempt to avoid the big picture and look busy while the economy sinks.)
It would be better if no one at the SEC went in to work. They should all just stay home and collect their pay and do nothing. Then there would be no pretense that there was anyone protecting investors, which is the true situation. Wall Street has one purpose these days, which is to funnel as much money as is humanly possible into the hands of insiders. The upper management steals from their clients, their investors and their workers. A deaf, mute, blind and toothless SEC is just one medium sized cog in the mechanism that enables the massive ongoing looting of the US and world economy.
Why is Snark Required?