On Wednesday, it was announced that a four-count indictment had been returned against a day trader with conspiracy to commit wire fraud, securities fraud, conspiracy to commit money laundering, and conspiracy to commit securities fraud and computer intrusions. The indictment alleges that between September 2014 and May 2017, 42-year-old Joseph Willner of Ambler, Pennsylvania and others conspired to hack into online securities brokerage accounts belonging to victims.
Then, it is alleged that the defendants used these accounts to place unauthorized trades. The indictment also claims that the defendant fraudulently liquidated existing positions to fund unauthorized trades. The indictment suggests that Willner used brokerage accounts in his own name to place “short sale” offers for stock at artificially high prices.
Willner’s co-conspirators are accused of hacking into victims’ accounts and using them to place buy orders at the artificially high prices to match Willner’s short sale offers. Then, the defendants allegedly used the victims’ accounts to repurchase the stock from the victims’ accounts at market or below market prices. These trades usually took place within minutes and usually resulted in Willner profiting.
The indictment suggests that one of Willner’s co-conspirators claimed that “legal trading too hard” on Twitter. Willner supposedly responded that he would make a “good trading partner”. As a result of scheme, the impacted brokerage firms lost more than $2 million. At this point in time, the defendants remain innocent until proven guilty beyond a reasonable doubt in a court of law.
Additional details can be found here.