SECURITIES AND EXCHANGE COMMISSION
LITIGATION RELEASE NO. 16852 / January 3, 2001
SECURITIES AND EXCHANGE COMMISSION v. IN SHIG AHN, Case No. 00 Civ. 4416 (RCC) (S.D.N.Y.)
INTERNET CROSS-TRADER IN SHIG AHN PERMANENTLY ENJOINED FROM COMMITTING SECURITIES FRAUD
The Securities and Exchange Commission today announced that on December 29, 2000, Internet stock trader In Shig Ahn was permanently enjoined from violating the antifraud provisions of the federal securities laws by Judge Richard Conway Casey of the United States District Court for the Southern District of New York. According to the Commission's complaint, in early June 2000 Ahn fraudulently obtained over $180,000 by cross-trading between two on-line accounts he maintained at two different Internet brokers, Terra Nova Trading and Interactive Brokers. Ahn funded his Terra Nova account with $351,950 in bad checks, and in the several days before the checks bounced, he traded stocks with himself over an electronic communications network to intentionally create losses in his Terra Nova account and corresponding gains in his Interactive Brokers account. Interactive Brokers froze his account before he could withdraw the illegal proceeds.
The SEC filed this action on June 15, 2000. At the same time, and for the same conduct, the U.S. Attorney's Office for the Southern District of New York indicted Ahn on criminal charges. In July Ahn pled guilty to securities fraud and wire fraud. In November he was sentenced to a year and a day of incarceration and ordered to pay $12,500 in restitution.
To resolve the SEC action, Ahn consented to a final judgment permanently enjoining him from future violations 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. He had already disgorged $186, 401 -- all of his ill-gotten gains -- to the victim of his fraud, Terra Nova Trading. The Court did not impose civil money penalties based on Ahn's showing that he lacked the financial resources to pay.