SEC Charges Traders With $31m Stock-Price Manipulation Scheme
18 October 2019: The US Securities and Exchange Commission (SEC) has taken emergency action to prevent a $31m stock manipulation scheme, after it found that 18 traders had manipulated the prices of thousands of trades.
The SEC filed an emergency action and put in place an asset freeze against the traders, who were primarily based in China. It alleges that they manipulated prices of thinly-traded securities by falsely creating the illusion of trade interest and activity in the stocks, which subsequently enabled them to artificially inflate or deflate their market value. Chief of the SEC’s Market Abuse Unit, Joseph Sansone, commented:
“We allege that defendants engaged in an extensive manipulation scheme and went to great lengths to evade detection, placing trades in over one hundred separate accounts at several different brokerage firms and submitting falsified documents to open new accounts in the names of others.”
The SEC’s complaint charges the traders with violating and aiding and abetting violations of the antifraud provisions of the securities laws. The US Attorney’s Office for the District of Massachusetts has meanwhile announced criminal charges against two of the traders.
