SEC Obtains Final Judgment Against Canadian Man Charged with Conducting Fraudulent Trading Scheme
Litigation Release No. 25319 / January 26, 2022
Securities and Exchange Commission v. Milrud, No. 2:15-cv-00237 (D.N.J. filed January 13, 2015)
On January 25, 2022, the Honorable Kevin McNulty of the U.S. District Court for the District of New Jersey entered a final consent judgment against a Canadian man whom the Securities and Exchange Commission charged with orchestrating a lucrative market manipulation scheme.
In its complaint, filed on January 13, 2015, the SEC alleged that Aleksandr Milrud, of Ontario, Canada, engaged in a manipulative trading practice known as "layering," in which a trader places orders solely to trick others into buying or selling stocks at artificially inflated or depressed prices. As alleged in the complaint, Milrud recruited online traders chiefly based in China and Korea and shared in the profits the traders made from manipulative trading in U.S. securities markets. According to the complaint, Milrud provided the traders with access to trading accounts and technology and instructed them on how to avoid regulatory scrutiny while engaging in layering strategies.
Milrud agreed to settle with the SEC and consented to the entry of a judgment permanently enjoining him from violating the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Sections 9(a)(2) and 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder and ordering him liable for disgorgement of his ill-gotten gains, which will be deemed satisfied by the order of forfeiture entered against Milrud in a related criminal action.
On the same day the SEC filed its action against Milrud, the United States Attorney's Office for the District of New Jersey announced parallel charges against him. Milrud pleaded guilty in the criminal action and was sentenced to five years of probation and ordered to forfeit $285,000.
The SEC's investigation was conducted by Barry P. O'Connell, Steven D. Buchholz, and Simona K. Suh of the SEC Enforcement Division's Market Abuse Unit; by A. Kristina Littman and Lynn H. O'Connor of the Enforcement Division's Cyber Unit; and by Nancy A. Brown and Elzbieta Wraga of the New York Regional Office. The case was supervised by Joseph G. Sansone, Chief of the Market Abuse Unit. The SEC appreciates the assistance of the U.S. Attorney's Office for the District of New Jersey, the Federal Bureau of Investigation, and the Financial Industry Regulatory Authority.