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July
21 Tuesday
2009

SEC Files Emergency Action Against Foreign Traders

Washington, D.C., Dec. 19, 2006 — The Securities and Exchange Commission today obtained an emergency asset freeze to halt an Estonia-based "account intrusion" scheme that targeted online brokerage accounts in the U.S. to manipulate the markets.

In an emergency federal court action filed in the United States District Court for the Southern District of New York, the Commission charged Grand Logistic, S.A., a Belize corporation located in Tallinn, Estonia, and its owner, Evgeny Gashichev, a citizen of Russia, with conducting a fraudulent scheme involving the manipulation of the prices of numerous stocks by the unauthorized use of other people's online brokerage accounts (account intrusions). The Commission alleges that, between Aug. 28, and Oct. 13, 2006, Grand Logistic and Gashichev made $353,609 in unlawful profits by conducting at least 25 separate manipulations, involving the securities of at least 21 companies.

Acting on the Commission's request, the Court today issued a temporary restraining order which, among other things, freezes the defendants' assets and orders the repatriation of funds taken out of the United States.

Linda Chatman Thomsen, Director of the SEC's Division of Enforcement, said, "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."