SEC Warning: Hackers, Limit Fraud to Traditional Means

U.S. SEC accuses U.K. man of hacking, fraudulent trades by Jonathan Stempel.

From the post:

The U.S. Securities and Exchange Commission sued a U.K. man it said hacked into online brokerage accounts of several U.S. investors, placed unauthorized stock trades, and within minutes made profitable trades in the same stocks in his own account.

“We will swiftly track down hackers who prey on investors as we allege Mustapha did, no matter where they are operating from and no matter how sophisticated their technology,” Robert Cohen, co-chief of the SEC enforcement division’s market abuse unit, said in a statement.

The case is SEC v Mustapha, U.S. District Court, Southern District of New York, No. 16-04805.

I can’t find the record in PACER. Perhaps it is too recent?

In any event, hackers be warned that the SEC will swiftly move to track you down should you commit fraud on investors using “sophisticated” technology.

Salting of news sources, insider trading, other, more traditional means of defrauding investors, will continue to face lackadaisical enforcement efforts.

You don’t have to take my word for it. See: Report: SEC Filed a Record Number of Enforcement Actions in FY 2015, Aggregate Fines and Penalties Declined by Kevin LaCroix.

Kevin not only talks about the numbers but also provides links to the original report, a novelty for some websites.

The lesson here is to not distinguish yourself by using modern means to commit securities fraud. The SEC is more likely to pursue you.

Is that how you read this case? 😉

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