SEC Takes Action Against Latvian Hacker 57
wiredmikey writes "The SEC has filed charges against a trader in Latvia for conducting a widespread online account intrusion scheme in which he manipulated the prices of more than 100 NYSE and Nasdaq securities by making unauthorized purchases or sales from hijacked brokerage accounts. The SEC also went after four online trading firms and eight executives who are said to have helped the hacker make more than $850,000 in ill-gotten funds. The SEC's actions occurred on the same day that the Financial Industry Regulatory Authority (FINRA) issued an investor alert and a regulatory notice about an increase in financially motivated attacks targeting email."
Bravo SEC! (Score:2)
Now, all of you other big smartie investor types, quit falling for phishing scams!
What a deterrent (Score:5, Insightful)
Two of the associates working for two of the named firms agreed to settle for $35,000 each in fines.
And the SEC wonders why people keep doing this sort of thing. I bet those two guys (and many other not charged) walked away with millions.
I'll Take Your Wager (Score:5, Interesting)
And the SEC wonders why people keep doing this sort of thing. I bet those two guys (and many other not charged) walked away with millions.
According to the court filing [sec.gov]:
Nagaicevs generated more than $850,000 in illegal profits from this scheme. His unauthorized trading in the hijacked accounts also caused losses in excess of $2 million which were reimbursed by the broker-dealer firms that carried the victimized customer accounts.
So how did the firms that the associates work for 'walk away with millions' when Nagaicevs got $850,000 and the total losses to the accounts was over $2 million? I'm guessing that since the firms that those associates worked for reimbursed those accounts that those two associates are facing some pretty upset employers. Is that really worth a couple hundred thousand?
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The guy who committed the fraud only made $850,000. How exactly do you make millions in brokerage off $850k in trade profits (yes, I know profitability of trades has no relation to brokerage, but this was a scam that presumably made a very high return). More reasonably, the firms involved made a few hundred thousand, tops, which they almost certainly had to forfeit, before any fines were levied. And the $35k was paid out of pocket by two individual brokers, and I'd guarantee it was more than they made of
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Besides, they guy's and idiot.
Man, that is just an amazing fucking statement.
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Two of the associates working for two of the named firms agreed to settle for $35,000 each in fines.
And the SEC wonders why people keep doing this sort of thing. I bet those two guys (and many other not charged) walked away with millions.
I was of the understanding that the proceeds of crime were treated vaguely similar to that in the UK - basically the fine is what happens on top of the seizure of your ill-gotten gains, and anything else that can be linked to your crime.
The seizures are often (over here) separate from the court case where they are convicted. There was even a case on the news recently where people got their assets seized permanently even though they were not convicted. I gather the point was that it was difficult to prove th
More Details and GBX Stock Example (Score:5, Informative)
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Preventing manipulation of the market might very well be the reason that FINRA issued the advisory and would be taking this seriously. According to the article:
As of December 2011, the attempted fraud amounts total approximately $23 million; the actual victim losses are approximately $6 million.
$23 million in attempted fraud up until Dec 2011 seems like peanuts to me.
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As of December 2011, the attempted fraud amounts total approximately $23 million; the actual victim losses are approximately $6 million.
$23 million in attempted fraud up until Dec 2011 seems like peanuts to me.
Actual fraud of $6M isn't peanuts; people go to prison for a lot less. Sure, there might be even bigger fish about as well, but that doesn't make it any less important to pursue this case. Letting scum get away with it encourages them to commit greater villainy.
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Remember that this figure includes all attempted fraud of this kind to date. Compare this to credit card fraud [wikipedia.org]:
The cost of card fraud in 2006 were 7 cents per 100 dollars worth of transactions (7 basis points). Due to the high volume of transactions this translates to billions of dollars. In 2006, fraud in the United Kingdom alone was estimated at £535 million, or US$750–830 million at prevailing 2006 exchange rates.
So, yes, $6m in actual cost to victims seems very low.
Never did I suggest letting unsavory individuals get away with their crimes. Merely suggesting that the powers that be might be more concerned with the market being played and causing much more damage than the obvious cost of siphoned funds to a few brokers.
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By stealing from people? Fuck off.
Re:1% are failing us again (Score:5, Insightful)
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Re:1% are failing us again (Score:5, Interesting)
Yeah, I'm sure he was planning on giving you and all your friends 20 cents.
Have you actually checked your position on the global "rich list" [globalrichlist.com]? You might actually be part of the 1%. I am, and I don't have anything to do with the finance market. I probably don't even make very much money compared to a lot of slashdotters, because I'm happy working in a small/medium business rather than being in a Fortune 500 or whatever.
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Hmm, well since you're in the middle, I guess you'd better stop "stealing" from poorer nations, eh? You shouldn't ever trade with other countries, because you're obviously just stealing their money (by your logic).
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Just do whatever that leads to economic recovery and growth and more income equality.
But don't mix up morality with legality, please. When bankers engaged in reckless risk taking and bankrupted us all in the process, it is hard to find a law against them but morally they were thieves in the direct meaning of the word.
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Why do people keep expecting economic "growth"? Growth in one place seems to me to imply shrinkage in another area.. which is exactly what you're complaining about!
Of course I haven't studied economics, so maybe that's not how "growth" works. But common sense dictates that it is..
"Income equality" is a load of bullshit unless everyone is doing the same work, in the same place. I don't complain that people doing the same job as me in London make more money - because their cost of living is also much higher t
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It's the same when you look to different countries too, the cost of living makes a difference.
Absolutely not. If you want to compare taking into account the cost of living then use purchase parity by all means. On a national level you may be right but to say that some malnourished Somalians have approximately the same quality life as Londoners is nonsense.
The line diving
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So you're saying it's somehow bad when it's the relatively rich people in the US being "oppressed" by the 1%, but it's fine when we are doing the exact same thing on a global scale?
All I see are people bitching how unfair their lives are, while ignoring the 90% of people who have even less than themselves.
There are very, very few people in this world actively trying to oppress anyone. Most of this stuff just happens with no thought of malice. There will always be people who come out on top either through th
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Europe is now in a deflationary spiral due to clueless economists and politicians. Basically is because currently the richest people for various reasons choose to invest their money not where it gives the highest economic benefit and growth to the nation/country/world/etc., but where they can retain their relative superior position over others.
And don't think that the US can somehow avoid being affected by this. The globalization, you know.
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The "for some reason" is that everyone works for their individual benefit, or at least that of those close to them. That's how life has always worked.
I'm not sure why you would expect those people to give up what they and their family have worked for any more than you'd let random homeless people sleep in your house for free every night.
Some rich people do give money to good causes, and that's nice, but there shouldn't be a law to force them to do so. They're already being taxed quite highly anyway.. so as
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Nope, "life always worked" is not how economy has ever worked since humans climbed from the trees and started to organize societies. It is all conscious intellectual construct. Some systems are better than others (capitalism vs. communism) but every one is created and continuously tinkered by careful deliberation.
I have no problem having some income inequality as long as it creates the most efficient system for growth. It is not happening at the moment. 20% unemployment in some parts of Europe is obscene. U
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Actually, yes, it is exactly how life works. Some species adapt better to their surroundings and dominate. Within social groups among animals, there is a pecking order. Those at the top get more mating opportunities, first dibs on food, etc..
Yes, most concepts in our society were made up by humans, which is why you need to think more carefully about them rather than just accept words like "growth".
Why do you expect that there should be 100% employment? Unless people start being used as personal servants or
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No other species have done what humans have done. It makes any biologic comparison meaningless when discussing human culture, economy, science etc. It is one of the most basic logic fallacies called "Appeal to nature" - http://en.wikipedia.org/wiki/Appeal_to_nature [wikipedia.org]".
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Okay, but to ignore the idea that our human nature naturally results in social and economic disparity is just as absurd.
Like I said, you can't at the same time ask for "growth" in your own nation without expecting someone else somewhere to lose out. Now, it wouldn't really hurt the rich to lose a bit of their money for that, but how are you going to decide who the money comes from, and who gets it? And how long do you think before those people have all your money again, if you don't actually change your spe
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Why not? Progress of science and technology can help us to produce more, to live better and have more wealth. In fact, improvement of technology goes very well together with greater social equality. A slave is not as effective worker as a well paid technician.
Global trade is good in theory. In practice it doesn't work too well in many cases because of asymmetric power. Rich
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What absolute nonsense.
If the Mars Bar factory increases production by 10% and the Tennent's brewery by 15% the whole economy has grown (along with the waistlines of the locals).
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Okay - so more money for Mars and Tennent's, and less money to whatever else people were spending their food money on.
I was imagining cases where you can "grow" the economy, but that doesn't seem like one of them. Growth definitely isn't infinitely sustainable, at least while we're limited to Earth's resources, and especially if the population keeps exploding, spreading those resources more thinly..
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Well partially, as I said elsewhere, I don't get worked up that people in London make more money than me for example.
It's not apples to oranges though - you could save up some money, then go and live like a king in the "2nd/3rd world". You really are a lot richer than them, even if you are eating the same amount of calories a day or whatever.
If you're upset that you're not making enough money, why don't you retrain for a job with a higher salary?
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that stupid thing says: top 0.37% based on annual income. However income is not a good approximation of wealth, because it doesn't show all of the actual investments that are not necessarily paying dividends at the moment.
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Well, it's not like those making below a certain threshold really have enough spare cash to make worthwhile investments anyway.. having spare cash for investments is the reason that once you get to the 1% stage, it's so easy to stay there and just keep accruing more wealth.
I'm at 0.89% as of last year, and I'm only just now thinking I should probably buy a house. I hate being in debt - even such a "socially acceptable" debt as a mortgage.
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So - - - next time I read of an American citizen raping some backwoods village or town for millions of dollars, causing the local citizens to become destitute, I should cheer for him because he's an American.
I don't know any Latvians personally. I can only hope that most Latvians are better people, and smarter, than you are.
Was this guy trying to get caught? (Score:2)
SEC is worthless (Score:3)
So when are they going to investigate the actual definition [wikipedia.org] of a pump and dump scheme [slashdot.org] ran by NIA [inflation.us], everything that they do, from Agria Corp (GRO) and Mega Precious Metals (MGP:CN) and now to Broadvision (BVSN) [yahoo.com]? They had plenty of notifications on this, it doesn't bother them or are they in on it?
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So when are they going to investigate the actual definition [wikipedia.org] of a pump and dump scheme [slashdot.org] ran by NIA [inflation.us], everything that they do, from Agria Corp (GRO) and Mega Precious Metals (MGP:CN) and now to Broadvision (BVSN) [yahoo.com]? They had plenty of notifications on this, it doesn't bother them or are they in on it?
I don't see absolutely anything wrong with Lebed did. He wasn't involved in any inside trading, and didn't have any more information on those companies than anybody else. He went on forums and bullshitted to get people to buy some stocks, but if you're buying stocks based on the advice of some dude in a forum without doing any of your own research...well, learn to take some responsibilities for your own actions and stop blaming others.
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If he's licensed and the information he gave is known to be incorrect, he violated the law. If he's licenses and gave information for the sole purpose of manipulating stock value, he violated the law.
They at it again? (Score:1)
Screw the SEC! (Score:1)
Read that as Latverian hacker (Score:2)
...and thought Doc Doom had really fallen on hard times.
The SEC is a sham (Score:2)
Madoff. One word suffices. He was detected a decade before he finally took himself down, and the SEC went out of their way to not investigate. Why? Because he was an insider. The only reason he was caught was that the market went down, and hi