Securities Law Prof Blog

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

Wednesday, July 15, 2009

Court Finds Butko Liable for Online Intrusion Scheme

The SEC announced that on July 6, 2009, the United States District Court of Connecticut entered a Default Judgment against Dmitriy Butko ordering him to pay disgorgement in the amount of $60,362 together with prejudgment interest of $10,494.92 and imposing a civil penalty of $520,000.  The Commission began this action by filing a complaint against Butko on August 7, 2008. The complaint alleged that Butko engaged in a modern, high-tech version of the traditional pump-and-dump market manipulation scheme. Specifically, the Defendant was trading in the common stock of issuers on the National Association of Securities Dealers Quotation System (Nasdaq) whose shares were being manipulated through unauthorized intrusions and trading in online brokerage accounts of unsuspecting at U.S. broker-dealers in violation of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder.

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