U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23592 / July 7, 2016
Securities and Exchange Commission v. Idris D. Mustapha, Civil Action No. 16-cv-4805 (S.D.N.Y.)
SEC Obtains Preliminary Injunction Against Uk-Based Trader for Account Intrusion Scheme
The Securities and Exchange Commission announced that on July 5, 2016, a federal court granted the SEC's motion for a preliminary injunction and continued the freeze of over $100,000 in assets in brokerage and bank accounts in the name of a United Kingdom resident, Idris Dayo Mustapha.
The SEC's complaint and emergency application, filed on June 22, 2016 in federal court in New York, allege that in April and May, Mustapha hacked into numerous accounts of U.S. customers of broker-dealers in and outside the U.S. The complaint alleges that Mustapha placed stock trades without the customers' knowledge and then traded in the same stocks through his own brokerage account. In one case, Mustapha allegedly hacked into a brokerage account and rapidly purchased shares at increasing prices and then profited by selling his own shares of the stock in his brokerage account. According to the complaint, Mustapha's scheme made at least $68,000 in profits and caused losses in the victims' accounts of at least $289,000.
The SEC's complaint charges Mustapha with violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5(a) and (c) thereunder, as well as Section 17(a)(1) and (3) of the Securities Act of 1933. The Commission is seeking permanent injunctions, disgorgement of ill-gotten gains with prejudgment interest, and financial penalties.
For further information, see Litigation Release No. 23580.