August 17, 2022
SEC Charges 18 Defendants in International Scheme to Manipulate Stocks Using Hacked US Brokerage Accounts
What happened?
The U. S. Securities and Exchange Commission (SEC) charged 18 individuals involved in a fraudulent scheme in which dozens of online retail brokerage accounts were hacked and used to purchase microcap stocks to manipulate the price and trading volume.
In late 2017 and early 2018, 31 U.S. retail brokerage accounts were hacked and used to purchase the securities of Lotus Bio-Technology Development Corp. and Good Gaming Inc. “The unauthorized purchases allegedly enabled fraudsters, who already controlled large blocks of Lotus Bio-Tech and Good Gaming sock, to sell their holdings at artificially high prices and reap more than $1 million in illicit proceeds.”
“The SEC’s complaint charges violations of antifraud and beneficial ownership reporting provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934.” The SEC identified two relief defendants who directly profited from the scheme and is seeking the reimbursement of gains plus interest, penalties, bars, and other equitable relief.
What should I do? / What does this mean for me and my firm?
“This case illustrates the critical importance of cybersecurity and of our ongoing efforts to protect retail investors from cyber fraud,” said Gurbir S. Grewal, Director of the SEC’s Division of Enforcement.
Establishing a well-rounded cybersecurity program within your firm will help mitigate attacks and provide an action plan if one occurs. Fairview Cyber can help your firm develop a cybersecurity program and assist with essential cyber and data security services like phishing prevention training, network penetration testing, vendor due diligence, and more. Contact us today for more information about our services.
