SECURITIES AND EXCHANGE COMMISSION
LITIGATION RELEASE NO. 16595 / June 16, 2000
SECURITIES AND EXCHANGE COMMISSION v. IN SHIG AHN, Case No. 00 Civ. 4416 (RCC) (U.S.D.C., S.D.N.Y.)
SEC FILES COMPLAINT CHARGING ONLINE
On June 15, 2000, the Securities and Exchange Commission filed a securities fraud case in the United States District Court for the Southern District of New York against In Shig Ahn, a resident of New Jersey. The Commission's complaint charges Ahn with engaging in a fraudulent online stock trading scheme by which he obtained about $180,000 in illegal profits. According to the complaint, during a three-day period earlier this month, Ahn placed numerous cross trades between online accounts he maintained at two different brokerage firms by carefully timing his orders and routing them through an electronic communications network (commonly referred to as an ECN). The complaint alleges that Ahn wrote over $350,000 in bad checks to fund one account, and then repeatedly bought and sold three thinly-traded, over-the-counter stocks to deliberately create a loss in that account and a corresponding profit in the second account. According to the complaint, Ahn then tried to take cash out of the winning account, apparently with the intention of absconding with the money.
The Commission's complaint charges Ahn with securities fraud in violation of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, and Exchange Act Rule 10b-5. It seeks a judgment permanently enjoining Ahn from violating the antifraud provisions of the federal securities laws, ordering him to disgorge his ill-gotten gains with prejudgment interest, and imposing civil money penalties.
In a related matter, also on June 15, 2000, the United States Attorney's Office for the Southern District of New York indicted Ahn on criminal charges of securities fraud and wire fraud.