The Securities and Exchange Commission accused a twenty-one-year-old Tampa student of participating in a fraudulent scheme to inflate the prices of several stocks by hacking into online brokerage accounts.
Aleksey Kamardin allegedly purchased shares of thinly-traded stocks in his online brokerage account before he, or others acting with him, took control of others' online brokerage accounts, according to the SEC complaint filed with the U.S. District Court's Tampa division.
They then sold the stocks in those accounts and used the proceeds to buy more of the shares they already owned--pumping up the stock prices. Shortly thereafter, Kamardin sold his shares at the inflated prices. Kamardin allegedly manipulated prices of 17 stocks between July 13 and Aug. 25, the complaint said. In all but three of the stocks he traded, he realized profits totaling $82,960.
"This new and emerging fraud combines modern day hacking and identity theft with the traditional pump and dump scheme,” said John Reed Stark, Chief of the SEC's Office of Internet Enforcement in a press release. “What historically required legions of con artists and days or even weeks of planning and execution was in this instance accomplished single-handedly or by a small group within only minutes.”
Kamardin wired the proceeds from his online brokerage account to a domestic bank account, then transfered the funds to a second account owned by his Russian-born roomate, according to the complaint. The roommate then wired the funds to a bank in Riga, Latvia.
Kamardin is believed to have fled to Russia to hide. According to his brokerage account application, Kamardin is a U.S. citizen with a liquid net worth of $15,000, the SEC complaint said.
The victims' accounts were at various broker-dealers, including E*Trade, Scottrade, TD Ameritrade, J.P. Morgan Chase and Charles Schwab.
Stark said online investors should review SEC safety tips and contact their financial institutions in order to ensure adequate protection.