Russian trader accused of carrying out online pump and dump
scam
22 Dec 2006
*****
A pump and dump scam has been publicly uncovered by the US
Securities
and Exchange Commission. The scam involved the manipulation
of stock
prices by means of using hijacked trading accounts.
According to a press
release from the SEC Russian national Evgeny Gashichev,
owner of
Estonian-based and Belize-registered trading firm Grand
Logistic,
carried out the scam.
The alleged scam was carried out between August and October
this year.
Mr Gashichev is thought to have pocketed more than $350,000
from at
least 25 incidents of pumpimg and dumping stocks. His modus
operandi was
quite straightforward: he purchased low-priced and
low-traded stocks of
small companies in the name of his Grand Logistic firm and
pumped up
their value by using illegally obtained usernames and
passwords from
other online brokerage accounts. This was done to simulate
trading
activity and manipulate the price of stocks, which he
subsequently sold
on at a profit, using the same stolen trading accounts.
The SEC has been investigating the case and has now obtained
an asset
freeze ruling on Grand Logistic from a federal court in
Manhattan. It is
unknown how many accounts were actually hijacked by Mr
Gashichev, but
steps are now being taken to return the funds that were
stolen and taken
outside the US in the scam operation. His current
whereabouts are
unknown, but the SEC believes him to be a resident of St.
Petersburg,
Russia. He is also known to have frequently travelled to
Tallinn,
Estonia, to carry out his business. The SEC is currently
working on the
case with its Estonian counterparts. Linda Chatman Thomsen,
Director of
the SEC's Division of Enforcement, warned potential
fraudsters, "Account
intrusions combine securities fraud, identity theft and
hacking. Our
action today demonstrates, once again, that the Commission
will seek out
and stop those who would prey on investors, in whatever
manner."
*****
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