SEC freezes assets of unknown Eastern European scammers in pump-and-dump scheme

Share this article:

A federal judge acted last week to freeze $3 million in assets from a Latvian-based bank's U.S. trading account allegedly belonging to an Eastern European crime ring.

The syndicate is accused of orchestrating what the Securities and Exchange Commission (SEC) is calling "a modern-day, technological version of the traditional ‘pump-and-dump' market manipulation scheme." 

The freeze was granted by the U.S. District Judge Ricardo Urbina at the request of the SEC pending a preliminary hearing. It stems from an SEC investigation that uncovered a group of foreign-based fraudsters who allegedly hacked into online brokerage accounts from seven different firms, sold off the stocks held within those accounts and funneled the profit from these sells to purchase stock from 15 pre-selected NASDAQ firms in order to manipulate the market.

Investigators with the SEC said that the unknown criminals had bought into these "thinly-traded" stocks prior to the intrusion and made over $732,000 in profit by selling off their shares once their purchases with the stolen money pumped up their selected stocks temporarily. The illegal actions cost the brokerages over $2 million in losses.

The perpetrators of the scheme are unknown, according to the SEC.

“In perpetrating their scheme, the defendants masked their identities by intruding into the online accounts using the IP addresses of innocent third parties and by trading anonymously through the domestic brokerage accounts of Latvian-based Relief Defendant JSC Parex Bank,” SEC lawyers wrote in their official complaint.

Now that the assets are frozen, the SEC has asked the court to order Parex Bank to hand over the frozen $3 million as part of a collection of ill-gotten gains, as well as prejudgment interest and civil penalties.

Click here to email West Coast Bureau Chief Ericka Chickowski.

Share this article:
You must be a registered member of SC Magazine to post a comment.

Sign up to our newsletters


More in News

Email promises free pizza, ensnares victims in Asprox botnet instead

Email promises free pizza, ensnares victims in Asprox ...

Cloudmark came upon an email that offers free pizza, but clicking on the link to get the coupon ends with victims being ensnared in a botnet.

Report: most orgs lacking in response team, policies to address cyber incidents

In its Q3 threat intelligence report, Solutionary learned that 75 percent of organizations it assisted had no response team or policies and procedures to address cyber incidents.

Flash redirect campaign impacts Carnegie Mellon page, leads to Angler EK

Flash redirect campaign impacts Carnegie Mellon page, leads ...

Malwarebytes found that, since early July, thousands of sites had been targeted in the campaign.