The Securities and Exchange Commission today announced fraud charges against a Ukraine-based trading firm accused of manipulating the U.S. markets hundreds of thousands of times and the New York-based brokerage firm and CEO who allegedly helped make it possible. The SEC's complaint alleges that Avalon FA Ltd touted itself to traders as a destination to engage in layering, a scheme in which orders are placed but later canceled after tricking others into buying or selling stocks at artificial prices, resulting in illicit profits. Avalon allegedly made more than $21 million in the layering scheme involving U.S. stocks during a five-year period. According to the SEC's complaint, Avalon also made more than $7 million in illicit profits through a cross-market manipulation scheme in which the firm bought and sold U.S. stocks at a loss in order to manipulate the prices of the stock and its corresponding options so that it could then profitably trade at artificial prices. Avalon allegedly used traders in Eastern Europe and Asia to conduct its trading, and the firm kept a portion of the profits and collected commissions from the traders. https://www.sec.gov/litigation/litreleases/2017/lr23776.htm
It's interesting that Lek Securities has also been charged with aiding and abetting this scheme. ---------------------------------------------- "The SEC further alleges that Lek Securities and its owner Samuel Lek made the schemes possible by providing Avalon with access to the U.S. markets, approving the cross-market trading scheme, and improving its trading technology to assist Avalon's trading. According to the SEC's complaint, Lek Securities also relaxed its layering controls after Avalon complained. Avalon was the highest-producing customer for Lek Securities in terms of trading commissions, fees, and rebates generated. After filing its complaint in U.S. District Court for the Southern District of New York, the SEC obtained an emergency court order freezing Avalon's assets held in its account at Lek Securities as well as freezing and repatriating funds that Avalon has transferred overseas."
Those charges were levied (or announced) on March 10th from guess who's office.... Preet Bharara Ukraine is involved. And what was this mystery Tweet Sunday all about where he said: "By the way, now I know what the Moreland Commission must have felt like." Hmmm. Any Trump conspiracy theorists in the house?
Buying and selling at a loss (I forget what they call it) to imply activity has been illegal for a long time. Longer than I have been alive. Who are these guys?