Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

Wednesday, July 11, 2007

SEC Obtains Default Judgment Against Intrusion into Online Accounts

The SEC announced that on June 20, 2007, a U.S. District Judge  for  the  Middle  District  of  Florida entered  a  default  judgment  against  twenty-one  year  old  Aleksey Kamardin.  The complaint  alleges that between July 13 and Aug.  25,  2006,  Kamardin commandeered  the  online  trading  accounts  of unwitting investors at  various  broker-dealers,  liquidated  existing equity positions and, using the resulting proceeds,  purchased  thinly traded stocks in order to create the appearance  of trading  activity and pump up the price of the stocks.  The  complaint  further  alleges that in seventeen instances, Kamardin,  in  his  own  account,  bought shares in the thinly traded issuer just prior to or at the  same  time that compromised accounts were made to buy shares, creating the  false appearance of market activity. Shortly after the intrusions,  Kamardin sold all of his shares at the inflated prices. In  all  but  three  of these instances, Kamardin realized a profit from his trading,  netting a total profit of $82,960.

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