AUDINDesign/iStock/Thinkstock(WASHINGTON) — A Canadian man was arrested on Tuesday and charged with allegedly orchestrating a large-scale international stock market manipulation scheme.
Aleksandr Milrud, 50, was charged with one count of conspiracy to commit securities fraud and one count of wire fraud. FBI agents arrested Milrud on Tuesday at his Aventura, Fla. home.
“As our complaint shows, illegally manipulating markets to cause even small price changes can yield large gains when done on a massive scale,” U.S. Attorney Paul Fishman for the District of New Jersey said. “The defendant and his far-flung network of conspirators operated an international scheme in which they generated millions of dollars in illicit profits for themselves with artificial trade orders executed at high speeds.”
The crime, known as “layering” or “spoofing” involves high-speed trading to buy or sell securities, and then cancelling the orders before they are executed. That action artificially manipulates the price of the security to induce other market participants to buy or sell at a price not representative of actual supply and demand, according to the Department of Justice.
The conspiracy charges carries a maximum penalty of five years in prison and a $250,000 fine, or twice the gain or loss from the offense, while the wire fraud count carries a maximum sentence of 20 years in prison and the same financial penalty.
Milrud represents the first federal prosecution of securities fraud involving “layering.”
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