SEC Charges Canadian Man with Conducting Fraudulent Trading Scheme

The SEC charged Aleksandr Milrud of Ontario, Canada with violating, and aiding and abetting violations of, anti-fraud provisions of the federal securities laws and the SEC's antifraud rule.

In its complaint, the SEC alleges that, since January 2013, Milrud perpetrated a market manipulation scheme using a trading strategy known as "layering" or "spoofing." Layering or spoofing is a strategy in which a trader creates a false appearance of buy or sell interest in a security by placing multiple orders on one side of the market, with no intention of having them executed, in order to artificially inflate or depress prices to the trader's benefit.

According to the SEC's complaint, Milrud recruited online traders who were based mostly in China and Korea to carry out the manipulative trading strategy. Allegedly, Milrud provided them with access to trading accounts and technology and instructed them on how to avoid regulatory scrutiny. The SEC is seeking a final judgment (i) ordering Milrud to return his allegedly ill-gotten gains with interest plus penalties and (ii) permanently barring him from future violations. In a parallel action, the U.S. Attorney’s Office for the District of New Jersey also has announced criminal charges against Milrud.

See: SEC Press Release; SEC Complaint. See also: U.S. Attorney’s Office Release.