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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."
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.
Absolutely not. This is criminal behavior. The vast majority of traders are law abiding citizens who are trying to make a living. They are necessary to allow for general market liquidity http://en.wikipedia.org/wiki/Market_liquidity and for the world economy to function. In a general economic crisis, everyone is going to get hurt, and some countries more so than others. It is also pretty damn clear that he was't using this money to help little orphans or unemployed widows or what not. This was money that the criminal directed to himself. And much of the money in the stock market is in pension funds and the like for all sorts of companies, so draining money from the market ends up hurting all sorts of people who are about to retire and live on fixed incomes or people who have already retired and are stuck on tiny fixed incomes. This isn't Robin Hood, this is a thief taking advantage of regular people.
Yeah, I'm sure he was planning on giving you and all your friends 20 cents.
Have you actually checked your position on the global "rich list"? You might actually be part of the 1%. I am, and I don't have anything to do with the finance market. I probably don't even make very much money compared to a lot of slashdotters, because I'm happy working in a small/medium business rather than being in a Fortune 500 or whatever.
which is totally what she said