Monday, April 9, 2007
The SEC announced that it obtained a temporary restraining order and an emergency asset freeze to halt a market manipulation scheme that used stolen identities of innocent victims to manipulate the markets. In an emergency federal court action filed April 5, in the U.S. District Court for the Southern District of New York, the Commission charged Alexis Ampudia, a 22-year old Panamanian citizen and resident of Brooklyn, N.Y., with conducting a fraudulent scheme involving the manipulation of the prices of numerous securities by using brokerage accounts he had opened in the names of identity theft victims, without their knowledge or consent. The Commission alleges that, since November 2006, Ampudia made at least $140,000 in unlawful profits by manipulating the securities of at least five publicly traded companies. The Commission's complaint alleges that Ampudia first purchased shares of small, thinly-traded companies, with low share prices, through his own online trading account. Immediately or soon thereafter, using online brokerage accounts Ampudia had opened in the names of identity theft victims, Ampudia placed a series of large purchase orders for the targeted securities, for the sole purpose of artificially increasing the price of the securities he had just purchased at lower prices. These purchases created buying pressure and the false appearance of legitimate trading activity, which caused the price of the securities to greatly increase. Ampudia then, at a profit, sold the shares he had earlier purchased in his own account.