[HN Gopher] Ten members of international stock manipulation ring...
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Ten members of international stock manipulation ring charged in
Manhattan
Author : mzs
Score : 142 points
Date : 2022-04-15 19:25 UTC (3 hours ago)
(HTM) web link (www.justice.gov)
(TXT) w3m dump (www.justice.gov)
| hristov wrote:
| I wish these indictments would list the companies involved. I
| read the indictments and they refer to the companies as Company 1
| - x. I also wish they would list the actual promotional material
| the defendants used. It would be very helpful to investors to see
| which articles are paid for by pump and dumpers, which authors
| write such articles, which websites publish them, etc.
| ajsharp wrote:
| too risky. any named companies' share price would plummet
| immediately.
| hackernewds wrote:
| yes even though they were the victims. that would be
| unwarranted
| nradov wrote:
| The entire OTC stock market is a swamp filled with alligators.
| Market manipulation and scams are rife, and many of the
| underlying companies are little more than scams. The SEC and
| Justice Department only find a fraction of the problems. There is
| the potential to make huge gains but individual investors should
| be very careful and do extensive research before trading.
| blantonl wrote:
| I recall there being a Pizza place in New Jersey or something
| that was a publicly listed company on the OTC worth tens of
| millions of dollars. Prime example.
| ricardobeat wrote:
| I can't help but think that this now looks like pocket money
| compared to the amount of fraud going on in the cryptocurrency
| market.
| jsemrau wrote:
| Dude this rabbit hole goes way deeper than one might think.
| Insider trading at coinbase ?:
| https://app.finclout.io/t/x3p3G27
| bb88 wrote:
| Well, the smart contract, or lack of smart contract allows
| it, so it must be legal, right?
| jsemrau wrote:
| The law is quite clear. The question is if it includes
| "alternative tradable assets" i.e. shitcoins.
|
| https://www.sec.gov/Archives/edgar/data/1164964/00010196871
| 5....
| mistrial9 wrote:
| .. which in turn is also pocket money compared to some Federal
| programs around the world, institutional use of retirement
| funds, inflated property values and insider loans.. all
| absolutely without one bit of cryptocurrency in them. smell the
| coffee, fraud is everyday
| blantonl wrote:
| My goodness wait until all this machine learning we've heard
| about happening with PPP loans starts to peel back the onion.
|
| Lots of shell companies out there...
| joshenders wrote:
| Ransomeware wouldn't exist to the same degree without crypto.
| Crypto's killer app is quite obviously fraud and illegal
| activity.
| tomatowurst wrote:
| problem is that it's very hard to cash out. monero for
| instance.
| JohnWhigham wrote:
| This is just another scheduled PR post for the DOJ to make it
| seem like they're tough on white collar crime when in reality
| they're as effective as a limp dick on prom night.
| ncmncm wrote:
| If you found out about such a ring and got visibility into what
| they were doing, and used what you discovered to profit at their
| expense (without doing any of your own manipulations, i.e. just
| buying and selling), would you be in trouble?
| twoodfin wrote:
| You'd probably be better off reporting them under Dodd-Frank
| whistleblower provisions. These apply not just to insiders
| reporting fraud, but also independent analysis which
|
| _use[s] the publicly available materials to show important
| insights about the possible securities laws violations that are
| not apparent from the face of the materials_
|
| https://www.sec.gov/page/frequently-asked-questions-whistleb...
| ncmncm wrote:
| Obviously you would do that _too_. But Bernie showed us how
| much good reporting people does.
| cbtacy wrote:
| If you found out about such a ring, got visibility into what
| they were doing, and didn't immediately seek competent legal
| advice - you would be an idiot.
| ncmncm wrote:
| That's a given.
| kube-system wrote:
| I suspect that if you knew about the scheme, and executed
| trades as a result of that knowledge, you would probably run
| afoul of this?:
|
| https://www.law.cornell.edu/uscode/text/18/1348
| ceejayoz wrote:
| No, you wouldn't be executing the fraud.
|
| Reading the statute that way would make companies like
| https://en.wikipedia.org/wiki/Hindenburg_Research illegal.
| elliekelly wrote:
| They make the alleged fraud public though, do they not? The
| comment you're replying to seems to suggest a strategy of
| intentional non-disclosure. I think that's a material
| difference when it comes to analyzing the legality of those
| two approaches.
| ElevenLathe wrote:
| Matt Levine said it best: "Everything everywhere is
| securities fraud."
|
| https://www.bloomberg.com/opinion/articles/2019-06-26/every
| t...
| IAmEveryone wrote:
| You can't take it literally in this sense. Among other
| things, investors cannot commit securities fraud, only
| executives can. Als, relatedly, Matt Levine's take
| regarding insider trading may be relevant here.
| kube-system wrote:
| > investors cannot commit securities fraud, only
| executives can.
|
| The very story you're commenting on is an example of a
| securities fraud scheme (pump and dump) that can be
| committed by investors.
| dmurray wrote:
| This definitely isn't true. Anyone lying to you in
| connection with a sale of securities in return for
| financial gain is committing securities fraud. According
| to any reasonable reading of the statute books, or any of
| hundreds of insider trading cases that do not involve
| executives.
| kube-system wrote:
| Ah, fair enough. I guess it would come down to the
| particular circumstance in which you were made aware?, i.e:
| https://www.law.cornell.edu/uscode/text/18/371
|
| Either way, I wouldn't be comfortable touching either
| situation with a 20 foot pole.
| ceejayoz wrote:
| > Either way, I wouldn't be comfortable touching either
| situation with a 20 foot pole.
|
| This is the right call, I think.
| tomatowurst wrote:
| I wonder if these guys were on r/wallstreetbets, I am seeing more
| and more blatant pump-and-dump schemes, this time in claiming
| "short squeeze" and writing call options that never materialize.
| nerdponx wrote:
| Wow, this looks like a pretty serious manipulation game they were
| playing:
|
| > First, the defendants and their co-conspirators secretly
| amassed control of the vast majority of the stock of certain
| publicly traded companies that were traded on the over-the-
| counter ("OTC") market in the United States. Second, the
| defendants and their co-conspirators then manipulated the price
| and trading volume for these stocks, causing the share price and
| trading volume to become artificially inflated, through
| coordinated trading and false and misleading promotional
| campaigns that they funded.
|
| I'm curious about which stocks were actually involved.
|
| I'm also curious how much they profited on this scheme, and how
| much capital they had to amass to get it started. It seems like a
| big investment and a lot of hard work by a lot of people! It's
| too bad they were using it to defraud people.
| selecsosi wrote:
| > The securities that the defendants and their co-conspirators
| sought to manipulate were issued by small companies, were
| thinly traded, and typically traded at less than $2 per share.
| These publicly traded shell companies frequently had few, if
| any, actual assets or actual business operations. While on
| paper the defendants and their co-conspirators had no
| connection to these companies, in reality they exercised
| substantial control, including installing management at the
| companies, financing the companies' operations, and funding
| payments for attorneys in order to prepare public filings with
| OTC Markets Group, Inc. and the Securities and Exchange
| Commission (the "SEC"). In order to attract investor interest,
| the defendants and their co-conspirators, at times, caused
| private businesses to be merged or "vended" into the publicly
| traded shell companies. The private businesses were often in
| industries likely to attract the investing public's interest
| matwood wrote:
| Wow, yeah. So not the normal pump and dump (buy, astroturf
| the stock, sell), but a full on fraud ring.
| zionic wrote:
| _Yawn_. They caught a few small-fish bad guys. While I'm glad
| they're going down (from my limited information on the
| subject) this pales in comparison to the active harm the SEC
| perpetrates against the average joe on a daily basis.
|
| I should be able to invest in _whatever I want_ no matter my
| net worth. It's my goddamn money and they have no right,
| after taking almost half of it, to then tell me that I can't
| spend it as I please. The worst part is I'm _paying_ (via
| taxes) for them to then tell me what I can't do.
| wpietri wrote:
| Nah. It's in society's interest to keep confidence in the
| markets up, because that's how you maximize total resources
| available for investment and economic growth. That
| confidence requires vigorous protection of investors,
| including the ones that think they're too smart to need
| protection.
|
| It's no coincidence that the US has strong enforcement and
| is also a top international destination for investment. If
| anything the SEC and the CFTC should be more vigorous, and
| I'm happy to pay to support them.
|
| If you personally really are too smart to need protection,
| they broadened the accredited investor definition last
| year, so there are a variety of ways to meet it:
| https://www.investor.gov/introduction-investing/general-
| reso...
| psychlops wrote:
| Society does not need higher and higher markets. In many
| ways it is the illusion of economic growth and treated as
| such. The brain and resource drain to financialization of
| everything from industries that actually produce
| something will be looked back upon poorly in the future.
| paulpauper wrote:
| I am sure they would have made more money just making fake
| YouTube crypto livestreams impersonating Saylor and Vitalik
| Buterin. No arrest risk either. I dunno why anyone would
| manipulate stocks or insider trade. Your adversary is the US
| federal government, the most powerful entity in the world with
| near unlimited resources at its disposal. Also, being busted
| for one trade means you will be busted for all of them because
| it's all recorded.
|
| _I 'm also curious how much they profited on this scheme, and
| how much capital they had to amass to get it started. It seems
| like a big investment and a lot of hard work by a lot of
| people! It's too bad they were using it to defraud people._
|
| Criminals generally have poor risk v. reward assessment, even
| white collar ones. 5 guys work together to rob a bank..if they
| just put 1 year of work at a 30-50k/year at a legit job, they
| would have same amount with no risk. They are not the smart,
| hence crime.
| ceejayoz wrote:
| Penny stock pump-and-dump schemes are very common. You've
| probably got hundreds of emails in your spam folder trying to
| pull it off.
| rdtsc wrote:
| > I'm also curious how much they profited on this scheme, and
| how much capital they had to amass to get it started. It seems
| like a big investment and a lot of hard work by a lot of
| people! It's too bad they were using it to defraud people
|
| "the defendants, collectively, made over $100 million by
| orchestrating 'pump-and-dump' stock manipulation schemes"
|
| It's also a rather international bunch. Wonder how they all
| found each other.
|
| > CURTIS LEHNER, a/k/a "Santa," a citizen and resident of
| Canada, and COURTNEY VASSEUR, a/k/a "Black Water Resource
| Management," a/k/a "Black Water," a/k/a "Cyrill Vetsch," a/k/a
| "Arctic Shark," a/k/a "Oscar Devries,"
|
| Well he wins the most silly names accumulated award from the
| list.
| kyleblarson wrote:
| Penny stocks have super low floats and huge spreads so they are
| ripe for manipulation.
| paulpauper wrote:
| but liquidity is a problem. you still have to cash out
| qiskit wrote:
| > Wow, this looks like a pretty serious manipulation game they
| were playing:
|
| It's a basic pump and dump. Nothing new nor interesting. It's
| been done for decades. There have been many movies on it -
| boiler room being one.
| kube-system wrote:
| My first thought was: https://en.wikipedia.org/wiki/The_Wolf_
| of_Wall_Street_(2013_...
| girvo wrote:
| > While on paper the defendants and their co-conspirators had
| no connection to these companies, in reality they exercised
| substantial control, including installing management at the
| companies, financing the companies' operations, and funding
| payments for attorneys in order to prepare public filings
| with OTC Markets Group, Inc. and the Securities and Exchange
| Commission (the "SEC"). In order to attract investor
| interest, the defendants and their co-conspirators, at times,
| caused private businesses to be merged or "vended" into the
| publicly traded shell companies. The private businesses were
| often in industries likely to attract the investing public's
| interest
|
| Slightly more interesting than your average pump and dump.
| [deleted]
| wpietri wrote:
| > It seems like a big investment and a lot of hard work by a
| lot of people! It's too bad they were using it to defraud
| people.
|
| A great deal of the financial industry uses a lot of money and
| brainpower to play zero or negative-sum games. The more
| egregious of those negative-sum games are eventually made
| illegal, and some of the people playing them get punished. But
| speaking as somebody who used to write software for financial
| traders, it's a relatively short trip from "zero-sum game that
| is currently legal" through "negative-sum game that could well
| be legal" to "negative-sum game where we think we won't get
| caught".
|
| It's true that one can societally justify a fair bit of that
| effort by pointing at things like more liquid markets, reduced
| trading costs, more accurate pricing, and the like. But
| approximately nobody trading for a living gets into the
| business because they care about any of those things enough to
| devote their lives to them. They're there to make money, and
| things like marketplace sanctions, regulatory investigations,
| and criminal enforcement are just another part of the cost-
| benefit analysis.
|
| When I was in the industry floor trading was still the focus.
| One slow day at the Chicago Board of Trade there was a guy in a
| polar bear suit walking around the trading pits. One trader
| turns to another, says, "I'll give you $100 if you punch the
| polar bear." The second one shrugs, takes the money, walks
| over, and punches the bear. Turns out the person in the mascot
| suit was wearing glasses, so they end up with a cut on their
| face and blood trickling down. It also turns out that the bear
| was there to raise money for the zoo, and some CBOT bigwig was
| on the board of the zoo. If I recall rightly, the punching
| trader was banned for life. The colleague who told me this
| story just smiled and, referring to the $100 gained, said, "Bad
| trade."
|
| I'm sure that there are plenty of people in the industry who
| look at these 10 guys and don't say, "What an outrage against
| the investors," or "I'm shocked that they'd tarnish the name of
| our industry that requires public confidence to function", but
| instead just smile and say, "Bad trade."
| gotaquestion wrote:
| "I'll give you $100 if you punch the polar bear."
|
| Sounds like a story for a sequel to "Liar's Poker"!
| blantonl wrote:
| And the name of the book: "Bad Trade"
| spaetzleesser wrote:
| For a while I knew guys that worked at hedge funds. Their
| whole thinking was about beating the competition and screwing
| as many people as they could while not being caught. They
| openly admitted that the taxpayers were stupid bailing out
| the industry in 2008 and kind of laughed at it. It's a
| terrible industry and it's shocking we allow them to run the
| country.
| Rury wrote:
| I mean to be fair, bailing them out, was also bailing us
| out. Banks can borrow some of people's money to fund
| mortgage loans. It just happened many loans at the time did
| so, and soured due to irresponsible lending. If they didn't
| bail them out, and you had 20k deposited in a bad bank;
| good chance it was simply gone. Bailing out the banks,
| guarantied that the innocent people got their deposited
| money back.
| pm90 wrote:
| The bailout was required to keep the financial system
| running which keeps literally everything else running.
| Supply chains would have broken down overnight without
| the availability of capital. If the major financial firms
| had shut down it would have had much worse effects than
| people losing their savings.
| oa335 wrote:
| worked in chicago trading for years. that attitude is
| endemic.
| hangonhn wrote:
| I used to work on the tech side of finance too. The hedge
| fund where I worked had a number of PIPE related violations
| where they ended up eventually settling and paying a fine
| without admitting guilt. For them it was just the cost of
| doing business. Breaking the rule and profiting minus the
| cost of the fines would just be a "good trade" to them.
| hackernewds wrote:
| $AMC and $GME
| DougMellon wrote:
| Is this the same issue: https://www.nsnews.com/bc-
| news/vancouver-stock-promoter-davi...
|
| If so, it appears at least $145 million.
| Scoundreller wrote:
| Bad link, but a Canadian publication may have converted into
| CAD$ which will juice the number by ~26%
| paulpauper wrote:
| _RONALD BAUER was arrested in the United Kingdom. CURTIS WILLIAM
| LEHNER, COURTNEY VASSEUR, and JULIUS CSURGO were arrested in
| Canada. ANTHONY KORCULANIC was arrested in Spain. PETAR MIHAYLOV
| was arrested in Bulgaria. Finally, DOMENIC CALABRIGO was arrested
| in the Bahamas. The United States intends to seek the extradition
| of BAUER, LEHNER, VASSEUR, CSURGO, KORCULANIC, MIHAYLOV, and
| CALABRIGO to the United States. CRAIG AURINGER, a citizen of
| Canada and resident of the United Kingdom, HASAN SARIO, a citizen
| and resident of Turkey, and DANIEL FERRIS, a citizen of the
| United Kingdom and resident of Monaco, were also charged and
| remain at large._
|
| The arm of justice is looong. I hope Turkey and others resist the
| extradition orders though and say "too bad" or as a joke not
| "until you investigate pelosi". Yeah I hate crime as much as the
| next guy, but the US cannot play world police forever.
| zeruch wrote:
| Extradition treaties work in more than just the direction of
| the US, and serve a functional purpose, for the same reason
| that foreign nationals who commit crimes in a jurisdiction CAN
| be adjudicated in that jurisdiction AND/or in their home
| jurisdiction.
| paulpauper wrote:
| you think Bahamas, Turkey, Spain cares that much? I can see
| maybe Canada complying
| lizardactivist wrote:
| Only large American banks and financial institutes are allowed to
| play that game.
| mcdonje wrote:
| They'll be fined 1M and sentenced to 90 days house arrest.
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