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U.S. Securities and Exchange Commission


Litigation Release No. 18696 / May 6, 2004

Securities and Exchange Commission v. Van T. Dinh, Civil Action No. 03-CV-11964RWZ (D. of Mass.) (October 9, 2003)

United States v. Van T. Dinh, Criminal No. 03-40035-NMG (D. Mass.) (October 9, 2003)


The Securities and Exchange Commission announced that on May 5, 2004, the United States District Court for the District of Massachusetts entered a final judgment against 20 year-old defendant Van T. Dinh, arising from charges that Dinh illicitly accessed an investor's online brokerage account and caused the unknowing investor to purchase soon-to-be worthless options held by Dinh. Without admitting or denying the allegations in the Commission's complaint, Dinh consented to the entry of the final judgment, which permanently enjoins him from violating the antifraud provisions of the federal securities laws.

In the Complaint filed on October 9, 2003, the Commission alleged that Dinh orchestrated a scheme to dispose of his large position in "out of the money" options to sell the common stock of Cisco Systems, Inc. On July 11, 2003, Dinh surreptitiously accessed and took control of the online brokerage account of a Massachusetts investor and placed buy orders in that account corresponding with sell orders he previously placed through his own brokerage account. As a result, Dinh avoided approximately $37,000 in losses he would have otherwise incurred had the options expired worthless in his account. While carrying out his scheme, Dinh took great pains to conceal his identity and evade detection, including assuming various online aliases, using multiple e-mail accounts, and employing foreign Internet service providers and several anonymizing websites.

The final judgment permanently enjoins Dinh from violating Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. In light of the fact that full restitution was paid in a related criminal action, disgorgement was waived. In addition, on the basis of Dinh's representations in sworn financial statements and other documents and information furnished to the Commission, a civil penalty was not imposed.

In a related criminal action prosecuted by the U.S. Attorney's Office for the District of Massachusetts, Dinh also was sentenced on May 5, 2004 to 13 months of imprisonment, to be followed by three years of supervised release. Additionally, a $3000 fine and an $800 special assessment were imposed. Prior to sentencing, Dinh paid full restitution to the victim investor in the amount of $46,986, which represented the entire amount of money taken from the investor's account. Earlier, on February 9, 2004, Dinh pled guilty to all counts of a criminal indictment that charged him with securities fraud, wire fraud, and unauthorized computer access in furtherance of a fraud. Additional information can be found in Litigation Releases Nos. 18401 (October 9, 2003) and 18576A (February 23, 2004).


Modified: 05/06/2004