December 12, 2016

The SEC charged New Jersey-based traders Joseph Taub and Elazar Shmalo with manipulating more than 2,000 NYSE- and NASDAQ-traded stocks and reaping more than $26 million in profits from their successful trades.  The SEC alleges that Taub and Shmalo utilized dozens of accounts at various brokerage firms to carry out their scheme undetected, typically using two at a time to engage in a flurry of manipulative trading activity that usually lasted less than five minutes.  According to the SEC’s complaint, they would use one account to buy a position in a stock, and then use a second account to place a series of small buy orders to walk up the price for the first account to sell its larger position into the market at an artificially high price for significant profits.  In some instances, before the first account purchased its position in a stock, Taub and Shmalo would have the second account place a series of smaller sell orders to drive down the price of the stock, allowing the first account to buy its larger position in that stock at an artificially lowered price.  SEC

Tagged in: Market Manipulation and Trading Violations,