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SEC Charges Day Trader for Fraud and Market Manipulation

Posted  November 1, 2017

By the C|C Whistleblower Lawyer Team

This week, the Securities and Exchange Commission (“SEC”) announced charges against a day trader accused of accessing over 100 victims’ brokerage accounts to make unauthorized trades that artificially altered various stock prices. The defendant, Joseph P. Willner, allegedly traded on those artificial prices using his personal account to secure at least $700,000 in illicit profits.

The SEC filed its complaint in U.S. District Court for the Eastern District of New York. Willner was charged with fraud and market manipulation in violation of federal securities laws and related SEC rules. The complaint alleges that Willner attempted to communicate anonymously with a third party regarding his fraudulent behavior, writing, “Legal trading too hard.” The SEC also alleges that Willner attempted to conceal payments to that third party by converting U.S. dollars to the digital currency Bitcoin.

The SEC is seeking disgorgement of Willner’s illicit gains, as well as statutory penalties and a permanent injunction. In a press release, the SEC noted that its investigation into Willner’s conduct is ongoing. In addition, the U.S. Attorney’s Office for the Eastern District of New York and the U.S. Department of Justice Criminal Division’s Fraud Section filed parallel criminal charges against Willner.

“Account takeovers are an increasingly significant threat to retail investors, and it is exactly the type of fraud our new Cyber Unit is focusing on,” said Stephanie Avakian, Co-Director of the SEC’s Division of Enforcement. “We are committing substantial resources to combating cyber-based threats to protect investors and our markets from intruders who manipulate the system for their own illicit gain.”

Tagged in: Market Manipulation and Trading Violations, Securities Fraud,